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What’s Next for SR Technics?

The ownership of the company has been the subject of speculation for some time with its Chinese owners reportedly weighing up a sale of the business.

As one of Europe’s largest MRO providers, SR Technics’ future ownership has been a source of speculation for a few months. In February, Bloomberg reported that owner HNA Group was reportedly exploring offloading its 80% stake in the Swiss MRO business for between $700 million to $1 billion.

The Chinese conglomerate became the majority owner of SR Technics in the summer of 2016 when it acquired the stake from Abu Dhabi investment fund Mubadala in SR Technics, a multi-capability repair business servicing airframes, engines and components employing more than 3,000 people worldwide.

While nothing has been confirmed as of late April 2019, any potential sale also wouldn’t come as a major surprise to those familiar with the recent history of HNA Group. Due to a Beijing-led crackdown on private companies carrying high debt levels, the conglomerate has already started divesting some of its other assets. Last month, its construction unit became the latest business to be offloaded to Times Holdings for around $890 million.

At the beginning of April, speculation began that private equity company Blackstone is exploring its options in the MRO market. The speculation stemmed from the asset manager, the world’s largest with a portfolio worth $472 billion counting the likes of MB Aerospace among the aerospace companies it owns, raising more than $22 billion from investors for its latest private equity fund.

While the intentions of Blackstone haven't been confirmed, its record fund raising was done to fund future buyouts. From a buying perspective, MROs have typically proved attractive for private equity companies. In the past year alone, the likes of U.S. engine MRO StandardAero and family-owned repair specialist Nordam have both been recipients of investment from Washington D.C.-based private equity firm The Carlyle Group.

However, despite any speculation about its future ownership, it’s business as usual at SR Technics with the business continuing to move forward with its projects. Last week, it announced its new €40 million ($44.8 million) center of excellence in the country is on course for completion in the first quarter of 2020.

First announced in February, the new 30,000 square metre hangar will service up to six narrowbody aircraft at one time. It’ll also lead to the creation of 350 jobs, adding to its existing team of around 300 people in Malta.

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