KUALA LUMPUR (Feb 13): Pos Malaysia Bhd is selling a 49% stake in its indirect wholly-owned subsidiary Pos Aviation Engineering Services Sdn Bhd to SIA Engineering Co Ltd (SIAEC) for an indicative cash consideration of RM10.09 million to facilitate the entry of SIAEC as Pos Aviation Engineering’s strategic partner.

Pos Malaysia said in a Bursa Malaysia filing today its wholly-owned subsidiary Pos Aviation Sdn Bhd has signed a share purchase agreement and shareholders agreement with SIAEC for the proposed divestment of the 49% equity interest comprising 7.84 million shares in Pos Aviation Engineering to SIAEC.

"Pos Aviation Engineering is a wholly-owned subsidiary company of Pos Aviation. The proposed divestment will facilitate the entry of SIAEC as Pos Aviation Engineering’s strategic partner and allow 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 MRO (maintenance, repair and overhaul), and tapping into new markets and distribution networks.

"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 final [cash] 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," Pos Malaysia said.

According to Pos Malaysia, SIAEC is a major provider of aircraft MRO services in Asia-Pacific. SIAEC has a client base of more than 80 international carriers and aerospace equipment manufacturers, Pos Malaysia said.

Pos Malaysia said 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 SIAEC’s service offerings. SIAEC has approvals from 25 national aviation regulatory authorities to provide MRO services for aircraft registered in the US, Europe, China and other countries," Pos Malaysia said.

At Bursa's 12:30pm afternoon break today, Pos Malaysia's share price closed one sen or 0.72% higher at RM1.40, valuing the company at RM1.1 billion. The stock saw 486,800 shares traded.