Destini disposes of stake in MRO JV for RM2.98 mil

KUALA LUMPUR (Nov 1): Destini Bhd is selling its 45% stake in commercial aviation maintenance, repair and overhaul (MRO) unit to its joint venture (JV) partner UK-based Avia Technique Ltd, a wholly-owned subsidiary of SK AeroSafety Group, for RM2.98 million cash.

In a filing with Bursa Malaysia on Tuesday (Nov 1), Destini said its wholly-owned subsidiary Destini Aviation Sdn Bhd (DASB) had entered into a share sale agreement (SSA) with Avia Technique for the stake sale in Destini Avia Technique Sdn Bhd (DAT). This leaves DASB with a minority stake in DAT of 5%.

Founded in July 2015, DAT is a 50:50 JV between DASB and Avia Technique. DAT specialises in component MRO for the commercial aviation sector such as oxygen cylinder, assemblies, fire extinguishers, survival equipment and emergency locator transmitter beacons.

According to Destini, the original cost of investment of DASB of the 45% stake in DAT was RM450,000 back in 2015. Based on DAT’s 2021 profit after tax of RM1.26 million, the disposal consideration represents a price-to-earnings ratio of 5.2 times.

“With the price-to-earnings ratio of 5.2 times, DASB is of the view that the disposal consideration is a good offer, with the challenging economy ahead. The proposed disposal also allows Destini to finance day-to-day operations and is expected to improve Destini’s consolidated financial position,” it said.

Prior to execution of the SSA, DAT had also declared a dividend payout amounting to RM1.05 million, in which DASB was entitled to 50% or RM524,711.40 of the dividend.

Destini said it intends to utilise the proceeds from the disposal and dividend for working capital and expansion of the group’s remaining businesses to generate its future earnings.

Destini’s shares closed down one sen or 11.76% at 7.5 sen on Tuesday, bringing the company a market capitalisation of RM124.76 million.