Singapore Airport Terminal Services (SATS) yesterday agreed to double its stake in Hong Kong's No2 air freight handling firm, just days after management unveiled terminal expansion plans at Chek Lap Lok that would double annual handling capacity by 2006. The deal, subject to approval by shareholders and other conditions, calls for SATS to pay S$76.5 million (HK$347.2 million) to acquire 24.5 per cent of Asia Airfreight Terminals (AAT), making it the single biggest shareholder in the firm. 'All AAT shareholders are supportive and pleased with the transaction that will increase our stake to 49 per cent,' said Karmjit Singh, SATS chief operating officer. 'The deal took about two to three months to put together.' SATS would acquire the 24.5 per cent of AAT held by Changi International Airport Services, said Mr Singh, who is also AAT chairman. AAT last week announced a HK$1.75 billion, Phase II expansion to more than double its freight handling capacity to 1.5 million tonnes by 2006. The firm - which has express giant Federal Express as a major customer and a 6 per cent shareholder - posted comparative 23 per cent growth in first-quarter volume, to more than 55,200 tonnes, despite challenging space constraints. It will take the deal to shareholders for approval on July 20 at its annual general meeting. AAT moves about 20 per cent of air freight at Chek Lap Kok, which is well on its way this year to setting another world record for volume in cargo handling. 'We are excited about the growth prospects for [Hong Kong International Airport] as north Asia's leading air freight hub and the key conduit for [high-value] goods moving to and from China,' chief executive Ng Chin Hwee said. 'The capacity expansion will enable AAT to tap into the growth opportunities.'