Cebu Air Inc. (CEB), operator of budget carrier Cebu Pacific, has dismantled its joint venture agreement with SIA Engineering Co. Ltd. (SIAEC) to streamline its aircraft maintenance operation.
In a disclosure to the stock exchange, CEB said it signed an agreement to divest its 35 percent stake in SIA Engineering Corp. with SIAEC for $7.7 million.
CEB also signed another deal with SIAEC for acquisition of the latter’s 51 percent stake in Aviation Partnership (Philippines) Corp. (APPC) for $5.6 million.
The two transactions resulted in CEB ceasing equity interest in SIAEP, and its 100 percent ownership of APPC.
CEB said the divestment is in line with its strategy to streamline its fleet management and rationalize its aircraft base maintenance, repair and overhaul offerings to optimize its operational efficiency and further strengthen its core competencies.
SIAEP is a joint venture between SIAEC and CEB established in 2008. SIAEC and CEB hold 65 percent and 35 percent share ownership, respectively.
SIAEP, located in Clark , Philippines, provides airframe maintenance, repair, de-lease checks, cabin retrofits and overhaul ser vices for 737, A320 and A330 aircraft as well as line maintenance ser vices at Clark.
Meanwhile, CEB said the acquisition is in line with its overall strategy to closely align its line maintenance operations and strategic objectives with its network and service requirements, for significant operational efficiencies and optimization of resources for an even stronger competitive advantage.
CEB signed an SPA with SIAEC last October 26 to acquire SIAEC’s entire 51 percent shareholding in APPC. The acquisition is subject to the satisfaction (or waiver) of conditions precedent set out in the SPA with SIAEC, following which APPC will become a wholly-owned subsidiary of CEB.