SIG.L Share News (SIG)

(Sharecast News) - Signature Aviation has agreed to sell its Engine Repair and Overhaul (ERO) business to StandardAero for $230m.

For the twelve months to the end of December 2019, ERO reported underlying EBITDA, on a pre IFRS 16 basis, of $29.1m net of support costs, while gross assets were $358.1m.

Signature said the sale is expected to close this year and to deliver around $140m of net proceeds subject to tax recovery. "The use of net proceeds will be consistent with our capital allocation policy, to manage net debt to underlying EBITDA (on a covenant basis), with a target range of 2.5-3.0x," it said.

Chief executive officer Mark Johnstone said: "We are pleased that we have reached agreement to sell our ERO business to StandardAero, where we believe the business will continue to flourish.

"We are committed to delivering long-term sustainable value for shareholders and this sale focuses us on Signature Aviation our strong cash generative business."