Rumours that Eurocopter may have a partner in its bid for helicopter maker

Published: 3/8/2000

Israeli producer, Elbit Systems, having not bid for recently privatised Aerostar, is rumoured to be contemplating entry to the tendering process around IAR Brasov. Local speculation says that Elbit plans to make a combined offer with Eurocopter, with the Israelis taking a 20% share, despite reports that Eurocopter already tendered for 70% of the helicopter and light aircraft maker on the 28th February,. Elbit Systems has been active in building relationships with Romanian companies for some time and is already operating a joint venture with Aerostar called A-E Electronics, cooperating on the upgrade of 80 Romanian Air Force MiG-21bis to MF Lancer standard, as well as jointly marketing the upgrade elsewhere in Eastern and Central Europe. The company has also collaborated in upgrading the Romanian trainer, the IAR “Soim”. In October 1999, the company was reported as being interested in bidding for Aerostar along with DASA, Lockheed Martin and Thomson, although no bids were forthcoming by the end of 1999, leaving only a private consortium of Aerostar employees and managers called Aerostar-PAS-IAROM in discussion with the state ownership fund. Recent reports suggest that a deal has been concluded with the consortium for Lei 60 billlion ($3.2m) in a deal that will take 3 years to conclude and will cost Lei 100 billion when adjusted for inflation at the end of the period. The remaining shareholders will be the investment fund SIF Moldova with 11.236% of the outstanding shares, the balance belonging to those who acquired them through the Romanian coupon based privatisation process and they are now trade thinly on the Bucharest exchange. The state will retain a golden share veto allowing it to override decisions relating to the military defence capability of the producer. The new owners have undertaken to provide the company with another $1.4m of capital over the next three years and are continuing, according to reports, to be looking for further relationships with strategic partners such as Elbit and Thomson, with whom they also have a joint venture. They also intend to raise private investment, whether they will be successful however, remains to be seen. The Romanian government is currently locked in arbitration with the UK's Britten-Norman in a dispute over the acquisition of Romaero, a licenced producer of the B-N Islander and Trislander, which has claimed that the Romanians were not sufficiently transparent in its dealings with the UK company when setting the price. The consortium will have to retain the core businesses of Aerostar for five years under the agreement and the company's debts, although it was reported to have made a profit of $360,000 for the first half of 1999.

Article ID: 1652