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Emirates trio stakes a claim on SR Technics

An engineer at Zurich-based aircraft services provider SR Technics Keystone Archive

A consortium of investors from the United Arab Emirates (UAE) is set to buy Zurich-based aircraft services provider SR Technics for SFr1.6 billion ($1.3 billion).

SR Technics said the new owners, Mubadala Development, Dubai Aerospace Enterprise and Istithmar, would purchase more than 90 per cent of the company.

Of this stake, Mubadala Development will own 40 per cent and Dubai Aerospace Enterprise and Istithmar will hold 30 per cent each. The remaining shares will be retained by the management of SR Technics.

The transaction, announced on Thursday, is still subject to regulatory approval and is expected to be finalised within two months.

Under the terms of the deal, SR Technics will keep its current management and 5,000 employees in place, with chief executive Hans Lerch staying on.

“This is a unique opportunity to accelerate our growth strategy supported by ambitious new owners with a strong strategic interest in our industry, excellent contacts within the fast-growing markets of the Middle East and Asia and a long-term commitment to our company and its customers,” Lerch said.

Building business

“This investment is all about building SR Technics’ business,” said Waleed Al Mokarrab Al Muhairi, chief operating officer of Mubadala Development.

“Our consortium wants to further grow the company based on its current strengths – including its highly reputed brand name and its skilled and motivated workforce.”

The planned deal puts and end to an initial public offering the company had set for later this year.

The Swiss ground staff union welcomed the acquisition. “The new owners are clearly strong financially, which is positive since SR Technics posted a loss last year,” said union president Philipp Hadorn.

This SFr2.5 million loss was incurred mainly as a result of integration costs relating to the company’s acquisition of FLS Aerospace.

Royal family

Mubadala Development is an investment vehicle of the Abu Dhabi royal family. Dubai Aerospace Enterprise was started in February this year. Istithmar is a private equity firm controlled by the government of Dubai.

Istithmar is headed by Sultan Ahmad Bin Sulayam, who also chairs Dubai Ports World, which ran into political hot water in the United States earlier this year when it bought ports operator Peninsular & Oriental Steam Navigation & Co for $6.8 billion.

Some US lawmakers expressed concerned about six ports involved in the deal. Dubai Ports World has since said it would sell the ports.

SR Technics started out as the technical support unit of Switzerland’s now-defunct national carrier, Swissair.

Following Swissair’s collapse in 2001, SR Technics was transferred to the new, private equity-led ownership. Its current owners, who paid SFr618 million for the company in 2002, include 3i Group and Star Capital Partners.

In August 2005 British low-cost airline easyJet signed a ten-year deal worth $1 billion (SFr1.26 billion) with SR Technics to maintain its fleet of Airbus A319 planes.

swissinfo with agencies

SR Technics:
Owned since 2002 by a group of private-equity investors 3i (56%), Star Capital (20%) and SR Technics (12%) management.
Workforce: 5,000 (2,800 in Switzerland).
Generates operating revenue of $1.4 billion in 2005).
Has about 500 customers around the world, including airlines Swiss, easyJet and Thai Airlines, and handles more than 750 aircraft.
SR Technics was fully owned by SAir Group. With the collapse of Swissair and the demise of SAir Group in 2001, SR Technics was transferred to its new ownership in December 2002.

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