SIA Engineering Company (SIAEC), which currently owns a 65% stake in SIA Engineering Philippines Corporation (SIAEP) has acquired the remaining 35% stake in the latter.
SIAEC, on Oct 26, entered into an agreement with Cebu Air (CEB) to acquire CEB’s entire shareholding in SIAEP at a consideration of US$7.74 million ($10.5 million) in cash.
The consideration was arrived at on a willing-buyer, willing-seller basis and took into account the net asset value (NAV) and financial performance of SIAEP.
The acquisition will be accounted for as an equity transaction.
Based on SIAEP’s audited financial statements for the FY2020 ended March 31, 35% of SIAEP’s NAV was US$9.32 million.
Following the acquisition, SIAEP will become a wholly-owned subsidiary of SIAEC.
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The change in SIAEP’s ownership is not expected to have a material impact on the net tangible assets (NTA) of earnings per share (EPS) of the SIAEC Group in FY2020/2021.
SIAEP, which has a state-of-the-art facility located in Clark, Philippines, provides airframe maintenance, repair, de-lease checks, cabin retrofits and overhaul services for 737, A320 and A330 aircraft, as well as line maintenance services at the facility.
In a separate statement, SIAEC entered into an agreement with CEB on the same day to divest SIAEC's 51% shareholding in Aviation Partnership (Philippines) Corporation (APPC) to CEB for a consideration of US$5.61 million.
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APPC is currently 51% owned by SIAEC and 49% by CEB. It is based in Manila, Philippines and provides line maintenance services at Manila, Cebu, Davao and Clark, as well as other secondary airports in the Philippines.
The divestment is expected to result in a gain of approximately $1.8 million for SIAEC for the financial year ending March 31, 2021.
Shares in SIAEC closed 1 cent higher or 0.6% up at $1.73 on Oct 26.
