Cebu Air, the parent company for Philippines LCC Cebu Pacific, and Singapore Airlines Engineering Company (SIAEC) have terminated two joint ventures in the Philippines, buying out each other’s shares in the Aviation Partnership (Philippines) Corporation (APPC) and SIA Engineering Philippines Corporation (SIAEP).
SIAEC will divest its 51% stake in APPC for $5.61 million in cash, making APPC a fully owned subsidiary of Cebu Air. The company provides line maintenance, light aircraft checks, technical ramp handling and other MRO services at Cebu (CEB), Clark (CRK), Davao (DVO) and Manila (MNL) airports. A March 31 audited financial statement put the shares at $4.76 million.
In turn, Cebu Air will sell its 35% share in SIAEP to SIAEC for $7.74 million in cash. SIAEP was established in 2008 at Clark and provides line and heavy maintenance services such as repairs, de-lease checks, cabin retrofits and overhaul services for Boeing 737s, Airbus A320s and A330s. The 35% share was worth $9.32 million in the March 31 audit.
Following the sale, SIAEP will be the Singapore company’s only presence in the Philippines.
“The acquisition of APPC is in line with Cebu Air’s overall strategy to more closely align its line maintenance operations and strategic objectives with Cebu Air’s network and service requirements, for significant operational efficiencies and optimization of resources to achieve an even stronger competitive advantage,” Cebu Air said in a stock announcement, adding that the SIAEP divestment is in line with its plan to streamline its fleet and rationalize its aircraft MRO offerings to “optimize its operational efficiency and further strengthen its core competencies.”
