Japan Airlines gains $7m stake in S China aircraft maintenance provider

Singapore Technologies Aerospace Ltd has signed a definitive agreement to divest a 5 percent equity stake in ST Aerospace (Guangzhou) Aviation Services Company Limited, a joint venture with Guangdong Airport Authority, to Japan Airlines Co Ltd (Japan Airlines) for $7 million (approximately S$9.3 million).

The consideration took into account STA Guangzhou's current performance, net asset value and growth potential in the fast-developing Baiyun International Airport, which is based in Guangzhou, the capital of Guangdong province, according to Singapore Technologies Engineering Ltd, the parent company of ST Aerospace.

Upon completion, which is subject to customary closing conditions, Japan Airlines will become a strategic partner of the joint venture, where 44 percent of STA Guangzhou's shares will be owned by ST Aerospace, 51 percent by Guangdong Airport Authority and 5 percent by Japan Airlines.

STA Guangzhou, set up in 2014, is an aircraft maintenance, repair and overhaul (MRO) station located within Baiyun International Airport.

Given Japan Airlines' strong reputation in quality and standards for both its services and demands placed on MRO providers, the new partnership will facilitate cross-learning and enable STA Guangzhou to enhance its own standing in safety and quality, better positioning it for further growth, according to Singapore Technologies Engineering.

Singapore Technologies Engineering is an integrated defense and engineering group specializing in aerospace, electronics, land systems and marine sectors.