SINGAPORE (Nov 25): CIMB is keeping its “hold” call and $4.02 target price on SIA Engineering following its divestment of stakes in joint ventures with Rolls-Royce.

In its Nov 23 announcement, SIA Engineering said it will divest its 10% stake in Hong Kong Aero Engine Services Limited (HAESL) to Rolls-Royce Overseas Holdings for $163.8 million.

Concurrently, HAECO will sell its 20% stake in SIA Engineering’s Rolls-Royce’s joint venture, Singapore Aero Engine Services Pte Ltd (SAESL), to Rolls-Royce Singapore for US$270 million. SIA Engineering will record a net gain of $186.8 million, which comprises of $148.7m from the divestment, and a $38.1 million in dividends from HAESL.

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