SIA Engineering Company (SIAEC) has divested its 39.2% stake in Asian Surface Technologies (AST) for US$2.79 million ($3.79 million) in cash, according to an announcement by the company on Oct 6.
AST is a joint venture based in Singapore between SIAEC (39.2%), United Technologies International Corporation (20.0%) and PAS TECHNOLOGIES (PAS) (40.8%). Its principal activities include the repair of aircraft engine fan blades and the provision of wear-resistant and high temperature corrosion- resistant coating services to the aviation, and oil and gas industries.
SIAEC’s stake in AST will be sold to PAS.
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The consideration was arrived at after arm’s length negotiations on a willing-buyer, willing-seller basis, and after taking into account, inter alia, the net asset value and financial performance of AST.
Based on AST’s audited financial statements for FY2020 ended December, the net asset value of the AST shares disposed of by SIAEC is S$3.81 million. SIAEC will recognise an estimated gain of S$2.68 million on divestment of its entire stake in AST.
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According to SIAEC, the company has been reviewing its portfolio of joint ventures for consolidation, and to focus on building next-generation aircraft capabilities. The divestment decision was made in light of the declining work volume at AST.
Completion of the sale has taken place and AST has ceased to be an associated company of SIAEC.
The transaction is not expected to have a material impact on the net tangible assets per share or the earnings per share of the SIAEC Group in FY2021/2022.
SIAEC shares closed up 1 cent or 0.47% higher at $2.13 on Oct 5.
