SINGAPORE - SIA Engineering Company and NokScoot Airlines Co have formed a line maintenance joint venture (JV) based in Thailand which will have an initial registration capital of 63.7 million baht (S$2.7 million).
Under the agreement, SIA Engineering will pay 31.2 million baht in cash for a 49 per cent stake in the JV, while NokScoot will pay 32.5 million baht for a 51 per cent stake, subject to regulatory approvals, the engineering arm of Singapore Airlines said on Monday (April 1).
The JV will start operations in Don Mueang International Airport and subsequently expand to other key airports in Thailand, the statement added.
NokScoot is an associate of Singapore Airlines (SIA) as it is 49 per cent owned by Scoot Tigerair, which is wholly owned by SIA's subsidiary Budget Aviation Holdings. Mr Ng Chin Hwee, a director of SIA Engineering, sits on the board of NokScoot as a representative of SIA.
The joint venture is not expected to have a material impact on the earnings per share or the net tangible assets per share of SIA Engineering for the financial year ending March 31, 2019, the statement said.
Mr Png Kim Chiang, SIA Engineering's chief executive officer, said: "The joint venture will allow SIA Engineering (SIAEC) to support NokScoot's growing fleet in Thailand and grow SIAEC's existing network of line maintenance international stations to 34 airports in seven countries outside Singapore."
Mr Yodchai Sudhidhanakul, NokScoot's chief executive officer, said: "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."
Shares of SIA Engineering were at $2.49 apiece, up three cents, as at 2.55pm.