2004-09-22 16:03 * RUSSIA * AIRCRAFT INDUSTRY * EADS * INVESTMENT *
EADS COMING TO RUSSIA
MOSCOW, September 22 (RIA Novosti) - The European aerospace and defense corporation (EADS), which hopes to buy 10 percent of Russia's Irkut aircraft-industry company, has decided to enlist the Russian Government's support, first and foremost. An EADS letter on approving this deal is now being examined by Russian Prime Minister Mikhail Fradkov, Vedomosti writes.
Stanislav Naumov, spokesman for Russia's Industry and Energy Minister Victor Khristenko, says that the Ministry doesn't object to EADS' buying an Irkut share package in line with current legislation. A source close to Irkut explains EADS interest by that corporation's desire to find out more about its partner. A 10 percent package would enable EADS to delegate its representative to the Irkut Board of Directors and to receive information about the corporate performance, said the source.
Analysts are also sure that Irkut will benefit from this deal; among other things, the company would be able to sell its products on European and US markets. Yelena Sakhova from the OFG believes that the purchase of 10 percent of Irkut stock would provide EADS with an additional incentive for implementing joint projects. Among other things, it would become possible to promote the Beriyev Be-200 flying boat and to turn out Airbus accessories. For his own part, Sergei Suvorov from the Zenit bank thinks this deal would provide Irkut with state-of-the-art technologies.
The Irkut corporation was established on the basis of the Irkutsk aircraft-industry association, as well as some R&D agencies and design bureaus. Irkut profits totaled $522 million over the 2003 period. Irkut mostly assembles Sukhoi Su-30-MK warplanes. EADS, which is a leading international aerospace and defense-industry concern, produces Airbus passenger planes, Eurocopter helicopters, as well as military-transport aircraft and space technology. The 2003 EADS turnover stood at 30.1 billion euros.
Eads targets Russian jet maker
Ross Tieman in Toulouse, Evening Standard
22 September 2004
EUROPEAN aerospace colossus Eads is in talks to take a strategic stake in Russia's Irkut, co-manufacturer of the Sukhoi 30 fighter plane.
In a deal that would mark a further reduction in European cold war enmity, Eads is aiming to win a stake in the burgeoning export market for Sukhoi's top multi-role combat aircraft, and its sister the Sukhoi 27 Flanker.
Sukhoi aircraft, Russia's most valuable arms export, have gained a fearsome reputation. Indian Air Force pilots flying Sukhoi 30s thrashed an American Air Force team flying Boeing F15 Eagle fighters in combat exercises earlier this year.
Eads is also interested in Irkut's Beriev 200 amphibious firefighting plane and its plans for a new generation of Russian airliners.
Spokesman Rainer Ohler confirmed the two companies were in talks but could not say whether the 10% stake mentioned by industry sources was correct.
'We are interested in taking stakes in Russian companies, including Irkut,' he said. 'We want to help the consolidation of the Russian aerospace industry.'
One source said Eads might wait to buy its stake until Moscow-listed Irkut had also achieved a listing in London or New York.
Irkut yesterday reported 2003 net profits of $1.8m (£1m) on sales of $522m, with operating profits of $75m.
Eads already works with State-controlled designer Sukhoi on the development of next-generation fighter planes under a co-operation agreement. Tying with Irkut, the only major Russian aerospace company that is not State-controlled, would give Eads - which makes Tornado and Typhoon fighters for the British and German air forces - further access to Russian fighter technology.
Such a deal would also open wider the door to the Russian civil aviation market. With a population of 145m in 10 time zones, and poor roads and railways, Russia promises to become a huge market for airliners.
Eads' civil jets arm Airbus, in which BAE Systems has a 20% stake, already counts several Russian carriers among its customers. Irkut has a contract to supply £10m of components a year to Airbus, rising to £40m in the next few years.
Despite its modest turnover, Irkut is a substantial business with 22,000 employees. The order book soared by $1bn to $4.5bn last year, and includes a $1.8bn order from India for 40 SU 30s, a $900m purchase of 18 of them by Malaysia and an order from Vietnam for six Su 27s.