SINGAPORE - SIA Engineering Company (SIAEC) unit Base Maintenance Malaysia has signed a 15-year lease agreement for two hangars at Sultan Abdul Aziz Airport in Subang, Malaysia.
In a bourse filing on Dec 20, SIAEC – a provider of aircraft maintenance, repair and overhaul (MRO) services – said the agreement, which carries an option to renew for another 15-year term, is significant as it establishes the group’s third base maintenance hub in the Asia-Pacific region.
The Subang hangars, each able to fit two wide-body aircraft, will boost the company’s airframe check capacity in providing comprehensive MRO of current and next-generation aircraft for its expanding portfolio of airline customers, it noted.
SIAEC chief executive Chin Yau Seng said the investment complements the group’s component and line maintenance joint ventures in Malaysia, allowing it to augment its extensive MRO offerings to its customers globally.
“With the expansion of our MRO network, this will further solidify our position as a leading provider of MRO services,” he said.
The lease agreement follows a non-binding memorandum of understanding with Impeccable Vintage Properties (IVP), a wholly-owned subsidiary of Malaysian sovereign wealth fund Khazanah Nasional Berhad, entered into in April 2022.
IVP chief executive Fuad Sharuji believes SIAEC’s establishment in Subang will bolster the thriving growth of Malaysia’s aerospace industry in support of the Malaysian government’s aspirations to position the country as a leading aerospace hub in South-east Asia.
Datuk Arham Abdul Rahman, the chief executive officer of the Malaysian Investment Development Authority, said the lease agreement “underscores a robust commitment from a prominent global aerospace MRO company like SIAEC to establish roots in Malaysia”.
The transaction is not expected to have a material impact on the net tangible assets per share or earnings per share of SIAEC for the financial year ending March 31, 2024, the group said.
Shares of SIAEC closed 0.9 per cent lower at $2.32 on Wednesday, before the announcement. THE BUSINESS TIMES
