Cebu Air ends deal with service firm

The operator of low-cost carrier Cebu Pacific is ending its deal with SIA Engineering Co. Ltd. (Siaec) involving joint venture companies.

In a disclosure on Tuesday, Cebu Air Inc. (CEB) bared the plan to acquire 905,641 shares or 51 percent stake of Siaec, the aircraft maintenance, repair and overhaul (MRO) unit of Singapore Airlines, in Aviation Partnership (Philippines) Corp. (APPC).

The deal, with each share is priced at $6.19, would amount to $5.6 million, CEB said.
APPC, founded in 2005, is a joint venture between CEB and Siaec, which provides line maintenance, light aircraft checks, technical ram handling and other MRO services to the budget carrier and other airlines. It has presence in Manila, Cebu, Davao and Clark.

“The acquisition is in line with CEB’s overall strategy to more closely align its line maintenance operations and strategic objectives with CEB’s network and service requirements, for significant operational efficiencies and optimization of resources for an even stronger competitive advantage,” the airline told the local bourse.

In a separate disclosure, CEB also said it inked a share sale and purchase agreement with Siaec to divest its 35 percent shareholding in SIA Engineering (Philippines) Corp. (Siaep).

Siaep, a joint venture between CEB and Siaec established in 2008, is focusing on airframe maintenance, repair, de-lease checks, cabin retrofits and overhaul services for 737, A320 and A330 aircraft, as well as line maintenance services in Clark, Pampanga.

“The consideration to be received is $7.74 million in cash,” it said.

“The change in CEB’s ownership of Siaep is not expected to have a material impact on the net assets or earnings per share of the CEB for FY (fiscal year) 2020,” the firm said.
Shares in CEB fell 4.05 percent or P1.65 to close at P39.05 each on Tuesday.