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SIA Engineering company invests in Pratt & Whitney new-generation engine to propel growth

Direct News Source

18-Jan-2010 Mainboard-listed SIA Engineering Company Limited (SIAEC) today announced it has signed a Definitive Agreement with Pratt & Whitney (P&W) to participate in its PW1000G Risk-Revenue Sharing Program (RRSP).

P&W, a world-leading manufacturer of aircraft engines, is developing the PW1000G engine to power Next Generation Single-Aisle (NGSA) aircraft. The PW1000G engine, scheduled to enter service in 2013, has already been selected as the sole-source engine for the Bombardier CSeries aircraft and Mitsubishi Regional Jet (MRJ) aircraft. SIAEC will participate in the PW1000G engine RRSP with a 3% stake in the CSeries aircraft engine program and a 1% stake in the MRJ aircraft engine program. To hold SIAEC's investments in the CSeries and MRJ aircraft engine programs, SIAEC has incorporated two special-purpose, wholly-owned subsidiaries, namely NexGen Network Holding (1) and NexGen Network Holding (2).

As part of the long-term arrangement, P&W will designate Eagle Services Asia (ESA), a joint venture between SIAEC and P&W, as the first engine centre in the global RRSP MRO network for the PW1500G engine (the PW1000G engine variant that powers the CSeries aircraft). ESA is poised to benefit from this designation. This arrangement will also provide feed to the SIAEC/P&W engine component repair joint ventures in Singapore.

"We are delighted that SIAEC is participating in P&W's Risk Revenue Sharing Programme, as it strengthens the strategic partnership between Singapore and global aerospace companies. SIAEC's investment will also reinforce Singapore's position as a global aerospace hub for undertaking high-value aerospace work. We congratulate both P&W and SIAEC for forming this partnership and wish them every success in the programme," said Dr Beh Swan Gin, Managing Director, Singapore Economic Development Board.

Mr William Tan, Chief Executive Officer of SIAEC said: "Our investments in P&W's new generation engine will attract high technology aerospace work into Singapore, thereby enhancing the vibrancy and growth of the Singapore Aviation Hub."

"By scaling up the MRO value chain through our investments in the development of the PW1000G engine, our P&W joint ventures will benefit from the downstream MRO work. The acquisition of new engine capabilities will also enable SIAEC to access the markets of next-generation aircraft powered by the new engines", Mr Tan added.

"We are pleased that SIAEC has committed to participate in our Risk Revenue Sharing Program for the PurePower PW1000G engine," said Todd Kallman, President, Pratt & Whitney Commercial Engines & Global Services. "By investing in the PW1000G, SIAEC is investing in the future of aviation technology for next generation aircraft."

The transaction is not expected to have a material impact on SIAEC's financial performance in FY2009/2010. None of the Directors of SIAEC has any interest, direct or indirect, in the transaction.