SINGAPORE (April 1): SIA Engineering Company (SIA EC) is establishing a $2.74 million line maintenance joint venture (JV) company in Thailand with low-cost carrier (LCC) airline, NokScoot Airlines.
The JV company is due to commence operations in Bangkok’s Don Mueang Airport (DMK) with the aim to subsequently expand to other key airports in Thailand.
Under the terms of the agreement, SIA EC will subscribe for a 51% stake in the JV for $1.34 million in cash – while NokScoot will hold the remaining 49% interest with a $1.4 million cash subscription.
NokScoot is an associate of Singapore Airlines (SIA), being 49%-owned by Scoot Tigerair, a wholly-owned subsidiary of SIA subsidiary Budget Aviation Holdings.
Png Kim Chiang, CEO of SIA EC, says the latest JV deal will allow the company to support NokScoot’s growing fleet in Thailand, while expanding SIA EC’s existing network of Line Maintenance International (LMI) stations to 34 airports in seven countries outside of Singapore.
“This joint venture is a significant milestone for us at NokScoot. It will help us to provide faster and more reliable line maintenance services to support our growth plan,” adds Yodchai Sudhidhanakul, CEO of NokScoot.
SIA EC does not expect the latest transaction to have a material impact on its earnings per share (EPS), nor net tangible assets (NTA) per share, for the current financial year.
As at 10.58am, shares in SIAEC are trading 3 cents higher at $2.49.
