ST Engrg

ST Engrg: its aerospace arm has signed agreements with Airbus and EADS to launch an A330 passenger-to-freighter (P2F) conversion programme. STAerospace will invest €110.5m (S$186.6m), made up of A330P2F engrg devt work and internally funded cash, for a 35% stake in EADS EFW. EADS will hold the remainder 65% shareholding and a call option on ST Aerospace’s 35% shareholding, which will lapse when the A330P2F work is successfully delivered to EADS EFW by the end of 2012. ST Aerospace will be the programme and technical lead during the A330P2F development phase while EADS EFW will drive sales and marketing activities. The investment is not expected to have any material impact on the earnings of STE in the current financial year but will reduce STE’s NTA by $148m. OCBC maintains Buy rating with TP $3.50.