SIA Engineering Company (SIAEC) has entered into an agreement with PAS TECHNOLOGIES B.V. (PAS) for the sale of SIAEC's entire 39.2% shareholding in Asian Surface Technologies (AST) to PAS. AST is a joint venture based in Singapore between SIAEC (39.2%), United Technologies International (20.0%) and 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.
The consideration for the sale of SIAEC's 39.2% stake in AST to PAS is US$2.79 million in cash. The agreement has been concluded after 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 the financial year ended December 31, 2020, the net asset value of the AST shares disposed of by SIAEC is SG$3.81 million.
SIAEC will recognize an estimated gain of SG$2.68 million on divestment of its entire stake in AST. SIAEC 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. (US$1.00 = SG$1.36 at time of publication.)
