Swire Pacific is set offer a bid worth around $382m to purchase the shares it currently does not own in Hong Kong Aircraft Engineering (HAECO).
The company currently owns around 74.99% of shares in the aircraft maintenance unit and expects to offer $9.20 per share as part of the proposed deal.
Scheduled to be completed by February next year, the deal is subject to a number of conditions, including the approval of HAECO majority shareholders.
Once completed, the existing minority shares of HAECO will be cancelled and the company will be de-listed from the stock exchange.
Through the deal, Swire aims to save costs and help create long-term strategic value.
Swire Pacific said in a statement: “HAECO is a core long-term strategic business for Swire Pacific. The proposal will enable Swire Pacific to consolidate its control over HAECO fully and is expected to allow an overall more efficient and cost-effective structure for Swire Pacific, with greater flexibility to manage the HAECO business.
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By GlobalData“Due to the low liquidity and the relative underperformance in the trading of HAECO Shares, Swire Pacific views the listing of HAECO Shares as no longer offering a viable source of funding for HAECO’s business.
“In fact, HAECO has not raised any equity funds from the public equity markets for over 30 years and Swire Pacific sees no practicable opportunity for this to happen in the foreseeable future.”
HAECO currently provides aircraft maintenance, repair and overhaul services to various airlines.
