ST Engineering and Adam Aircraft Sign Strategic Partnership For Very Light JET And PISTON Aircraft

Singapore Technologies Engineering Ltd (ST Engineering), through its aerospace arm, Singapore Technologies Aerospace Ltd (ST Aerospace), today signed a letter of intent (LOI) with Adam Aircraft Inc (AAI) to establish a strategic partnership to address the very light jet (VLJ) and piston aircraft market segments.

Under the partnership, ST Aerospace will provide engineering, logistics (including components), maintenance and repairs support for VLJ and the twin piston aircraft designed by AAI. Tapping on ST Engineering’s strength in these areas, AAI seeks to lower the cost of ownership and provide total aviation support for its light jet and piston aircraft. The partnership will also provide ST Aerospace with the option, exercisable within seven years, to invest up to US$50m in the company.

This partnership is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.

AAI is based in Englewood Denver, Colorado, and has staff strength of 540.  It specialises in the design and manufacture of very light jet and piston aircraft and to date has an order book of over 350 for its A700 VLJ and A500 twin piston aircraft, valued over US$700m.

VLJs fit into an emerging market category in the US and globally.  Aircraft in this category use jet engines and are at a price range that competes with the traditional propeller-driven small aircraft.  They are sandwiched between general aviation aircraft and small commercial planes which typically cost between US$4m and US$15m.  VLJ’s cost between US$1.5m and US$3.0m and seat between three to ten passengers.  They are well suited as air taxis as they can transport passengers regionally without routing through aviation hubs, saving time, and can operate on short runways of 3,000 feet.  Being jet powered, they are more efficient than propeller aeroplanes or other forms of land transport, and can offer cheaper fares than small commercial aircraft.  Buyers of VLJs range from fractional, charter operators, and corporates to high net worth individuals.

“Being a young company, we are pleased to be associated with the world’s largest third-party MRO service provider, ST Aerospace, which can provide not only first class MRO services for our customers but can also help our marketing efforts through their global footprint.  AAI expects to have a leading position in the twin piston and very light jet markets in North America and eventually, globally.  We are excited about having a global engineering team from ST Aerospace. With ST Aerospace as our strategic partner, we will together be able to provide a wide range and depth of expertise and capabilities to support AAI's rapid growth in North America.”  ~ Rick ADAM, CEO, Adam Aircraft

“AAI represents a new strategic partner and customer for ST Aerospace.  In addition, it presents us with the potential to tap into an emerging and promising VLJ market and the latest composite technology.  The AAI partnership builds upon our strengths in MRO, aircraft logistics and engineering and extends our range of relationships with OEMs.”  ~TAN Pheng Hock, President and CEO, ST Engineering

We welcome this strategic partnership between ST Engineering and AAI.  The VLJ market has tremendous potential, and will add a new dimension to Singapore's aerospace industry.  ST Engineering's partnership with AAI will no doubt help bring to Singapore, capabilities in the entire value chain of VLJ activities; from design and development to manufacturing and assembly and, of course, Maintenance, Repair and Overhaul (MRO)  ~Teo Ming Kian, Chairman, EDB

This LOI is non-binding and subject to due diligence studies expected to be completed in 60 days.

Adam Aircraft is a designer and manufacturer of advanced aircraft for civil and government markets. The company uses computer-aided design, rapid prototyping, advanced manufacturing techniques, and carbon composite materials to produce high-performance aircraft at attractive prices. The A500 twin-engine piston aircraft has been Type Certified by the FAA, and the A700 AdamJet is currently undergoing flight test and development. The company’s largest outside investor is Goldman Sachs. Adam Aircraft headquarters are based on Centennial Airport (APA) in Englewood, Colorado with additional facilities in Pueblo, Colorado, and Ogden, Utah. Please visit www.adamaircraft.com.

ST Aerospace is the aerospace arm of ST Engineering.  Operating a global MRO network with facilities in Asia Pacific, Europe and the U.S., it is the world's largest airframe MRO with a global customer base that includes many of the world's leading airlines, airfreight operators and military operators.  ST Aerospace provides a full spectrum of maintenance and engineering services through its three business segments: Aircraft Maintenance & Modification (AMM), Component / Engine Repair & Overhaul (CERO), and Engineering & Materials Services (EMS).  Its services include airframe, engine and component maintenance, repair and overhaul; engineering design and technical services; and aviation materials and management services, including Total Aviation Support.  ST Aerospace has a global staff strength of more than 5,000 engineers and technical specialists. Please visit www.staero.aero.

ST Engineering is an integrated engineering group providing solutions and services in the aerospace, electronics, land systems and marine sectors.  Headquartered in Singapore, the Group reported revenues of $3.34b in FY2005.  Its market capitalisation of over $8b ranks it among the largest companies listed on the Singapore Exchange.  ST Engineering has about 14,000 employees worldwide, and over 100 subsidiaries and associated companies in 17 countries and 29 cities.  Please visit www.stengg.com.

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