• The S$30 million lab will play a key role in developing advanced ATM capabilities

September 25, 2019– The Civil Aviation Authority of Singapore (CAAS) and Thales have announced the establishment of a S$30 million Joint Aviation Innovation Research (AIR) Lab in Singapore to drive innovation in new air traffic management (ATM) technologies. The agreement to establish the AIR Lab was signed between Mr Kevin Shum, Director-General, CAAS, and Mr Jean Ferré, Vice-President Air Traffic Management, Thales on the sidelines of the International Civil Aviation Organization (ICAO) Innovation Fair in Montreal.

The AIR Lab will focus on the development of an Open ATM System architecture minimum viable product as its immediate priority. This project will be a key enabler for CAAS’s next-generation ATM system. Through the AIR Lab, Thales will be increasing its level of investments into ATM-related research in Singapore by bringing in domain experts and hiring software engineers, system engineers and integrators. Supported by the Aviation Transformation Programme (ATP)[1], which seeks to develop innovative ATM solutions for Singapore, the AIR Lab will also provide a platform for multiple stakeholders, including Singapore enterprises with complementary capabilities, to collaborate on these new technologies and develop corresponding prototypes.

The AIR Lab builds on the deep partnership and collaboration between CAAS and Thales.  In February 2018, the two organisations signed a Memorandum of Understanding to cooperate on developing new Concepts of Operations for ATM as well as the next generation of digital ATM technologies. In March this year, a follow-up agreement was signed at the World ATM Congress in Madrid to conduct research and development for an Open ATM System architecture .

Mr Kevin Shum, Director-General, CAAS, said, “CAAS is constantly looking ahead and ensuring that we are future-ready. The solutions developed by the Lab will enable CAAS to manage the increasingly complex ATM operations in one of the busiest and most complex airspaces in the world. By bringing together key stakeholders in the ATM ecosystem and providing access through an open platform, the AIR Lab will also play a key role in deepening Singapore’s expertise in ATM.”

“The AIR Lab is the first of its kind for Thales in Asia and will allow us to pioneer new technologies with CAAS in the digital aviation field. It serves as a great tool for Thales to tap on and develop expertise to Singapore’s ATM and ANSP ecosystem, while working in close partnership with CAAS and other complementary partners to build capabilities for the future,” said Mr Jean Ferré, Vice-President, Air Traffic Management, Thales.

The AIR Lab is expected to be launched in early 2020 and established for an initial period of three years. The AIR Lab will be co-located with the Thales Digital Factory in Singapore to draw synergies between the two facilities.

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1. The Aviation Transformation Programme builds up Singapore’s R&D capabilities to address challenges arising from increased air traffic and constraints in manpower, land and airspace.  Supported by the National Research Foundation Singapore, the programme facilitates collaboration between the industry and the research community in developing innovative solutions to solve challenges faced by the aviation sector.

2.An Open ATM System architecture is modular, scalable and supplier agnostic. It therefore enables greater flexibility and new ATM innovations to be integrated at an accelerated pace. An Open ATM System architecture will also benefit the ATM community and Air Navigation Service Providers (ANSPs) who can tap on the R&D knowledge and architecture to level up their ATM systems and innovate improvements.

• Joint venture would exclusively provide inflight connectivity hardware and entertainment services on HNA airlines, comprising over 320 aircraft today with the potential to grow to over 500 planes
• Shareco plans to invest up to $416 million in GEE stock at $11 per share through a combination of primary and secondary share purchases

Los Angeles, CA | November 8, 2016– GEE (“GEE”) (NASDAQ:ENT), today announced it has entered into a strategic alliance and an investment agreement with Beijing Shareco Technologies Co., Ltd. (“Shareco”, NEEQ: 837676), an affiliate of HNA Group, one of China’s largest conglomerates. GEE and Shareco plan to create a joint venture (“JV”) to provide inflight entertainment and connectivity (“IFEC”) in China and exclusively service aircraft operated by HNA airlines. Shareco will make an initial primary equity investment in GEE of approximately $103 million, as well as contemplated additional primary and secondary common equity purchases upon the formation of the JV that would bring the total expected investment to $416 million.

Under terms of the contemplated transactions, GEE and Shareco would form a JV to provide IFEC and passenger monetization services to HNA airlines. GEE would sell its equipment, including its Airconnect antennas, network services and engineering and product support directly to the JV. The JV would be the exclusive provider of IFEC to HNA aircraft. This fleet comprises over 320 aircraft today and is expected to grow to over 500 aircraft in the future.

GEE currently operates live connectivity and television services in the Chinese IFEC market, and since 2013, GEE’s Chinese growth program has included investment in a Beijing office, local engineers, partnerships with Chinese media and advertising firms, connectivity trials and teleport infrastructure. GEE works with all of the Tier-1 telecommunications providers in China and, upon implementation of the JV, expects to be well-positioned in the highly competitive China IFEC market, with the JV having exclusive access to aircraft currently comprising a significant portion of the Chinese commercial aviation market. Currently, GEE has trial contracts with Shareco to provide services to several airlines within the HNA Group.

Shareco is a Beijing-based company that has developed and implemented an established advertising and passenger monetization model as the exclusive provider of e-commerce, games, content and advertising solutions to numerous airlines within and out of HNA’s fleet, including Hainan Airlines, Beijing Capital Airlines, Yangtze River Express, Tianjin Airlines and Okay Airways, among others. Shareco currently provides innovative tablet-based IFEC services to over 200 aircraft. Shareco is affiliated with HNA Group, a Fortune Global 500 corporation based in China with a proven track-record of acquisitions and investments in the aviation and travel industries.

“The transaction would bring together two industry leaders to accelerate IFEC adoption and improve the passenger experience in China. The completion of our JV with Shareco would accelerate our growth and solidify GEE as a major IFEC provider in the rapidly growing Chinese market,” said Dave Davis, CEO of GEE. “We are thrilled to partner with Shareco and HNA Group to drive new revenue opportunities and provide unparalleled connectivity and passenger entertainment products for HNA airlines and the Chinese market.”

“We are investing in GEE based on its leadership in the mobility space and unique position of offering an integrated suite of connectivity and content products,” said Jason Sun, Chairman of Shareco. “Our investment and strategic alliance will accelerate adoption of inflight connectivity, advertising and e-commerce in the Chinese market and bring a differentiated experience to passengers.”

Transaction Details

Shareco’s investment and creation of the JV is planned to occur in two stages. First, Shareco has agreed to acquire newly issued common shares of GEE for $11.00 per share, resulting in a 9.9% post-investment ownership stake. Based on GEE current shares outstanding, the initial investment is expected to total approximately $103 million for approximately 9.3 million newly issued shares of GEE. GEE will use the proceeds from this investment for general corporate purposes. The first stage of the transaction is subject to regulatory review and other customary closing conditions.

In connection with the second stage of the transactions, GEE and Shareco will negotiate binding documentation including an investment agreement providing for additional Shareco primary and secondary equity investments and a definitive JV agreement. Upon formation of the JV, Shareco would purchase up to $150 million of additional primary shares from GEE at $11.00 per share, with the proceeds used by GEE to invest in the JV as described below. In addition, in connection with the second stage of the transaction, Shareco would commence a tender offer to GEE’s stockholders to acquire shares at $11.00 per share in an amount which would result in Shareco holding an expected 34.9% ownership stake in GEE, through an expected aggregate investment of up to approximately $416 million, inclusive of both investment stages of the transaction. The second stage of the transaction is subject to the parties entering in a definitive investment and JV agreements, as well as regulatory review, GEE shareholder approval and other customary closing conditions.

GEE is expected to own up to 49% of the JV, and Shareco would own the remainder. In connection with the formation of the JV, GEE would invest up to $150 million into the JV, and Shareco is expected to contribute substantially all of its assets and liabilities, including exclusive contractual rights to provide IFEC services to HNA airlines. Upon completion of the second investment, Shareco would have the right to nominate GEE Board of Director seats proportionate to its ownership position in GEE. GEE expects to be actively engaged in the management of the JV, including having the rights to appoint key JV officers.

GEE expects that the completion of Shareco’s initial primary investment will occur during the first half of 2017, with the JV and second stage equity investments completed later in 2017.

BofA Merrill Lynch and Barclays are acting as financial advisors to GEE, and Simpson Thacher & Bartlett LLP is acting as legal advisor to GEE. Moelis & Company is acting as exclusive financial advisor to Shareco. Sidley Austin LLP and Fangda Partners are acting as legal advisors to Shareco.