By SHAZNI ONG
POS Malaysia Bhd is divesting its 49% stake in Pos Aviation Engineering Services Sdn Bhd to SIA Engineering Company Ltd (SIAEC), for an indicative cash consideration of RM10.09 million to facilitate the entry of SIAEC as Pos Aviation Engineering’s strategic partner.
In a Bursa Malaysia filing yesterday, Pos Malaysia said its wholly owned subsidiary Pos Aviation Sdn Bhd entered into a share purchase agreement (SPA) and shareholders agreement (SHA) with SIAEC in relation to the proposed divestment.
“Pursuant to the SPA, Pos Aviation shall transfer 7.84 million ordinary shares representing 49% equity interest in Pos Aviation Engineering to SIAEC,” the postal delivery service company said.
The indicative disposal consideration was arrived at on a “willing buyer willing seller” basis and after taking into consideration the unaudited net assets of Pos Aviation Engineering as of July 31, 2019, of approximately RM20.59 million.
This also includes the market value of Pos Aviation Engineering’s property, plant, and equipment as of Oct 1, 2019, of RM12.26 million as appraised by an independent valuer.
Pos Malaysia said the final consideration will be determined based on the latest available management financial statements prior to the completion date after incorporating the agreed similar adjustments in arriving at the indicative disposal consideration.
“The proposed divestment will facilitate the entry of SIAEC as Pos Aviation Engineering’s strategic partner.
“(It also) allows Pos Aviation Engineering to expand its customer base by enhancing its technical expertise in the aviation sector, expanding its product offerings and diversifying into new lines of maintenance, repair, and operating supply (MRO); and tapping into new markets and distribution networks,” Pos Malaysia added.
Pos Malaysia noted the proposed divestment will not have any effect on the company’s issued and paid-up share capital and substantial shareholders’ shareholdings.
“There will also be no material effect on Pos Malaysia Group’s consolidated earnings, gearing and net assets for the financial year ending Dec 31, 2020.
“Upon completion of the proposed divestment, Pos Aviation and SIAEC will hold 51% and 49% equity interest in Pos Aviation Engineering respectively and Pos Aviation Engineering will become a jointly-controlled entity of Pos Aviation,” the company said.
Pos Aviation Engineering was incorporated on April 9, 1998, and has a total issued and paid-up share capital of RM16 million.
Its principal activity is the provision of aircraft maintenance and engineering services. For the financial year ended March 31, 2019, Pos Aviation Engineering’s audited revenue is approximately RM25.71 million, while its loss after taxation is approximately RM1.67 million.
SIAEC, meanwhile, is a major provider of aircraft MRO services in Asia Pacific, according to Pos Malaysia and has a client base of more than 80 international carriers and aerospace equipment manufacturers.
The company added that SIAEC provides line maintenance services at 36 airports in eight countries, as well as airframe and component services on some of the most advanced and widely used commercial aircraft in the world.
“Apart from MRO services, SIAEC also offers a comprehensive and integrated suite of solutions under its fleet management services.
“The 26 ventures with original equipment manufacturers and strategic partners in Singapore, Hong Kong, Indonesia, Japan, the Philippines, the US, Vietnam and Thailand increase the depth and breadth of the SIAEC’s service offerings.
“SIAEC has approval from 25 national aviation regulatory authorities to provide MRO services for aircraft registered in the US, Europe, China and other countries,” Pos Malaysia said.
Shares of Pos Malaysia closed 0.72% or one sen higher to RM1.40 yesterday, valuing the company at RM1.1 billion.