UMS Holdings Invests In Malaysian Aerospace Manufacturer, ASF

SINGAPORE, Jan 28 (Bernama) -- UMS Holdings Ltd has entered into a definitive shareholders agreement with Malaysian-based All Star Fortress Sdn Bhd (ASF), an aerospace metallic component manufacturing company. ASF is one of 20 local companies approved under the Malaysian Government's Economic Transformation Plan to develop the local aerospace manufacturing industry. Singapore firm UMS, meanwhile, is a strategic integration partner in manufacturing and engineering for front-end semiconductor equipment manufacturers. "We are excited with the prospects of this investment. In the short term, we foresee a slight boost to profitability as we can expect some interest income and rental revenue from this collaboration," UMS Chief Executive Officer Andy Luong said in a statement Wednesday. "Over the longer period, we intend to work closely with ASF to expand their footprint and become a sizeable player within the aerospace industry. The Group expects it will become the major shareholder of ASF in the years to come." This latest investment is part of UMS's strategy to diversify beyond its traditional semiconductor business segment, and aims to achieve an alternative revenue source as well as allow the Group to venture into a high potential growth sector within the aerospace industry. Under the agreement, UMS' wholly-owned unit, Ultimate Machining Solutions (M) Sdn Bhd will subscribe for a 10 per cent equity in ASF for RM145,000. Ultimate Machining Solutions will also make available to ASF up to US$7.5 million (US$1 = RM4.25) for, among others, working capital purposes; building a special process line; and to purchase the necessary equipment and machines. Under the agreement, UMS will be granted the option to convert the balance loan amount into additional ordinary shares of ASF. On top of providing financial support to ASF, the Group will also rent out part of its unutilised manufacturing facility to ASF on a commercial basis. Moreover, ASF will be compensating UMS for the costs and expenses incurred in providing the fixtures, fittings and basic infrastructure in the Penang premises. As such, the Group does not expect material capital expenditure in relation to its investment in ASF. With the increasing trend of international aerospace players outsourcing more work as well as the Malaysian Government's efforts to further develop the local aerospace manufacturing industry, the Group believed that with its support, the collaboration was in a good position to capture these strong growth potentials. ASF was incorporated to support the local aerospace supply chain as many of the international aerospace players such as Airbus, General Electric, Honeywell, Spirit Aerosystems, Safran Messier-Bugati, SR Technics, Singapore Aerospace Manufacturing, Thales, Hamilton Sundstrand and many others have a manufacturing presence in Malaysia. --BERNAMA