SINGAPORE, 15 FEBRUARY 2020 – Mainboard-listed SIA Engineering Company Limited (“SIAEC”) today announced that it has entered into a joint venture agreement with Air Innovation Korea Co., Ltd (“AIK”), to form a line maintenance joint venture based in the Republic of Korea (the “Joint Venture”).
Under the agreement, SIAEC will hold an equity stake of 51% in the Joint Venture, with AIK taking the remaining 49% stake. The agreement and services to be provided are subject to the receipt of regulatory approvals.
The Joint Venture company will have an initial registration capital of KRW 4,772,000,000, or approximately S$5,525,212. SIAEC will subscribe for KRW 2,433,720,000, or approximately S$2,817,858, in cash and AIK will subscribe for KRW 2,338,280,000, or approximately S$2,707,354, in cash.
This partnership supplements the Aero-K Airlines’ (“Aero-K”) A320 CEO / NEO fleet Inventory Technical Management Programme where SIAEC will support the airline for component pooling as well as repair and overhaul management services commencing in March 2020. The services will be provided for a period of six years for each fleet type. Aero-K, a wholly owned subsidiary of AIK, plans to commence operations in March 2020 from their base in Cheongju International Airport in the Republic of Korea. Aero-K is expected to operate 4 A320 aircraft by end 2020, growing to 15-20 aircraft within 5 years.
The Joint Venture and the Inventory Technical Management Programme are not expected to have a material impact on the earnings per share or the net tangible assets per share of SIAEC for the financial year ending 31 March 2020. None of the Directors of SIAEC has any interest, direct or indirect, in the transaction.