ST Engg unit bags another rail project in Guangzhou

SINGAPORE Technologies Engineering’s subsidiary ST Electronics has won another mass rapid transit project in Guangzhou, China, taking the tally to six. It will supply platform screen doors for the Guangzhou-Foshan Line (GFL) that will run 32.3km from Kuiqi Station in Foshan to Lijiao station in Guangdong province.

ST Electronics will design and supply equipment and software, and install, test and commission 42 sets of doors spanning 21 stations. The doors are a safety barrier to the tracks and synchronise with the opening of train doors. The contract, awarded by Guangzhou Metro Corporation and Foshan Metro Corporation, is worth 53.6 million yuan (S$11.3 million).

Work is expected to be completed by the second half of 2010. ‘ST Electronics is delighted to be awarded another project in Guangzhou,’ said company president Seah Moon Ming. ‘It reflects our customers’ confidence in the quality, safety and cost-effectiveness of our rail electronics solutions.’

ST Electronics was recently awarded contracts to supply an automatic fare collection system for Bangkok’s Mass Transit System’s Silom Line extension and a train communications system for Hong Kong’s Mass Transit Railway (MTR).

The Guangzhou contract is not expected to have a material impact on ST Engg’s consolidated net tangible assets per share or earnings per share for the current financial year.

ST Engg unit wins 1st military contract

ST Engineering said yesterday its indirectly-owned subsidiary VT LeeBoy Inc has been awarded its first military contract.

VT LeeBoy has secured a contract worth over US$11 million from US Army Contracting Command to supply asphalt paving equipment to the US Army over five years.

This contract marks the first step in the special vehicles unit supplier’s attempt to diversify its customer base during the downturn.

‘The contract award from the US Army recognises the quality and overall value that LeeBoy’s products deliver and, hopefully, it will enable LeeBoy to break into foreign military sales as well,’ a company spokesperson said.

The agreement is not expected to have a material impact on the group’s consolidated net tangible assets per share or earnings per share for the current financial year.

VT LeeBoy is a wholly-owned subsidiary of VT Systems, which in turn is a wholly-owned subsidiary of ST Engineering.

ST Engineering’s stock closed three cents higher at $2.55 yesterday.

ST Engg lines up US$1.2b medium-term note funding

Rated AAA by S&P, it will allow ST Engg to ‘pursue opportunities’

SINGAPORE Technologies Engineering (ST Engg) has set up a US$1.2 billion multi-currency medium term note programme ‘as a pre-emptive measure’ to diversify its funding options.

‘The programme provides us with the agility to quickly raise funds to pursue opportunities, should the need arise,’ said president and chief executive officer Tan Pheng Hock.

The medium-term notes programme was set up through a wholly owned subsidiary. The notes will be ‘irrevocably and unconditionally guaranteed’ by ST Engg and the programme has been rated triple-A by Standard & Poor’s Rating Services, which also has a triple-A rating on the company’s corporate credit.

‘The ‘AAA’ rating on ST Engg reflects our opinion that there is an extremely high likelihood that the government of Singapore would provide timely and sufficient extraordinary support to ST Engg in the event of financial distress,’ said Standard & Poor’s credit analyst Wee Khim Loy, noting that Singapore’s Ministry of Defence is the company’s largest customer. ‘We assess the stand-alone credit profile of ST Engg to be ‘AA’.’

Moody’s is expected to release its rating soon, ST Engg said. Deutsche Bank and Morgan Stanley are the joint lead arrangers.

The company said money raised from the issue of notes will be used to fund new capital expenditures, acquisitions, for general corporate services and refinancing of existing borrowings.

As at March 31, the latest period for which data is available, ST Engg had short-term borrowings of S$249.5 million, down from S$586.7 million at Dec 31, 2008. However, total borrowings was S$912.7 million, up from S$881.4 million in December.

Separately, ST Engg said yesterday that it had won a S$26.5 million contract from the Land Transport Authority to maintain electrical and mechanical systems in the Kallang Paya Lebar Expressway. The contract was awarded to ST Synthesis, a wholly owned subsidiary.

ST Engg closed at S$2.41 yesterday, down 3 cents or 1.2 per cent on volume of 1.45 million units.

ST Aerospace wins 2 separate contracts worth a total of $48m

ST Engineering unit ST Aerospace has won two separate contracts worth a total of $48 million.

In China, the company has signed a US$21 (S$30.4) million deal to repair and maintain the Airbus A321 fleet of Shanghai Airlines.

The eight-year maintenance-by-the-hour deal, which starts in July, expands the scope of services ST Aero provides to Shanghai Airlines. The latter is currently already a maintenance, repair and overhaul (MRO) customer for engines and components.

ST Aerospace has also clinched a 9 million euro (S$18 million) maintenance deal with new Copenhagen-based regional airline Cimber Sterling.

The five-year contract is for component support for Cimber Sterling’s fleet of five B737NG planes. The airline flies to about 20 destinations around Europe.

Pudong-based Shanghai Airlines is one of the larger airlines in China by fleet size, with 55 planes flying domestic and international routes. The latest deal is the third area in which ST Aero is providing services to Shanghai Airlines.

ST Aero – which is the world’s largest air-frame maintenance and third party air-frame maintenance company, surpassing competitors Lufthansa Tecknik, Hong Kong’s HAECO and AirFrance-KLM – has six major global bases.

The company currently has a maintenance contract order book of just over S$11 billion.

Besides its two Singapore facilities – Sasco and STA Engineering – ST Aero’s MRO bases include ST Mobile Aerospace in Alabama, San Antonio Aerospace in Texas, Panama Aerospace Engineering and Shanghai Technologies Aerospace (Starco).

The company, which accounts for almost half of listed ST Engineering’s income, is also one of the world’s leading passenger-to-freighter (PTF) conversion outfits.

Besides, Starco, which is a 49 per cent joint venture with Shanghai-based China Eastern airlines, ST Aero’s China operations include Xiamen-based ST Aerospace Technology Company and its component logistics-focused Guangzhou Aerospace Technologies & Engineering Company.

In Europe, ST Aero’s facilities include Madrid Aerospace Services, which specialises in landing gear, ST Aerospace Solutions in Oslo and Airlines Rotables in London.

ST Engrg wins $40m LTA deal to extend Emas

THE Land Transport Authority (LTA) has awarded a $40 million contract to ST Engineering to extend the Expressway Monitoring and Advisory System (Emas) to major arterial roads here.

Emas provides live-video surveillance, incident detection and real-time traffic alert functions on Singapore’s expressways. It is integrated into LTA’s back- end systems to facilitate central monitoring and traffic control. Major arterial roads serve as bypass routes to the expressways.

The new contract was awarded to a unit of ST Engineering’s electronics arm ST Electronics. Project work will begin in 2010 and is expected to be completed by 2013. The system’s introduction ‘will optimise the available capacity of existing transport infrastructure and enhance road utilisation’, ST Engineering said.

ST Electronics president Seah Moon Ming said: ‘We are delighted to be awarded the contract to expand Emas to arterial roads. We are pleased that our technologies in world-class transport management and solutions will help keep Singapore’s roads efficient and safe, and make driving a more pleasant experience.’

Over the years, ST Electronics has built a track record in providing transport management systems in Asia, Australia, Europe, the Middle East and the US.

ST Engineering said the latest contract is not expected to have a material impact on the group’s consolidated net tangible assets per share or earnings in the current financial year. In FY 2008, the group reported revenue of $5.34 billion.