Hubline Berhad (“Hubline” or “Company”), a Bursa Malaysia listed company primarily involved in the shipping industry, announced today its new business venture into the aviation industry with the completion of the acquisition of 51% stake in Layang Layang Aerospace Sdn Bhd (“Layang Layang Aerospace”).
A filing with Bursa Malaysia showed that the exercise involved the acquisition of 510,000 ordinary shares representing 51% equity interest in Layang Layang Aerospace Sdn Bhd for a total purchase consideration of RM 14.198 million.
According to the acquisition, Layang Layang Aerospace will generate a Profit after Tax (“PAT”) of not less than RM10.5 million in total with a minimum of RM3.0 million PAT for any one year, for the financial years ending 31 December 2019, 2020 and 2021, or equivalent to 36 months, after taking into account the intended change of financial year end to 30 September to be co-terminus with the financial year of Hubline.
Layang Layang Aerospace started its operations in 1994 in Miri, Sarawak, by aircraft engineer turned entrepreneur Tuan Haji Johan Poong Abudllah. Layang Layang Aerospace recently celebrated its silver jubilee, when it was initially focused in providing that very important air link to connect the rural areas of Sarawak and Sabah.
Hubline Chief Executive Officer and Managing Director Dennis Ling Li Kuang said: “The new business venture shall help to broaden the revenue base of Hubline into air logistics and other areas of aviation with the expectation of generating positive earnings to the Company. The business venture is also in line with Hubline’s business expansion plan to increase its revenue base to complement our current line of businesses.”
He said Layang Layang Aerospace is a registered service provider for Petronas and is entering the oil and gas air transportation services, with new bases in Miri and Kota Kinabalu as one of its major upcoming projects.
“The oil and gas transportation sector is picking up again and Layang Layang Aerospace with its safety record for the last 25 years and backing from Hubline, is in good position to expand into the sector,” he added.
He said that Layang Layang Aerospace is in the midst of procuring two additional fixed wing aircraft and six helicopters (2 twin and 4 single engines) to support the growing demand of general aviation services in the region. With this addition, Layang Layang Aerospace fleet will comprise 28 aircrafts including a mixture of helicopters and fixed wing aircrafts, making them the largest general aviation operator in the country.
“Layang Layang Aerospace’s core business is in the general aviation sector which plays a very important role in Sabah and Sarawak especially in supporting the government initiatives of supplying medical care to the rural people in Sabah and Sarawak by providing an important air link for the Flying Doctor and Emergency Medical Air Evacuation services,” he said.