AgustaWestland is believed to be close to signing a deal with the UK Ministry of Defence (MoD) to convert and upgrade a total of 25 AW101 Merlin helicopters currently operated by the Royal Air Force for use by the Royal Navy.
Insiders say the formal signing of the contract is due in the coming days or in early 2014.
Worth a total of £330 million ($540 million), the deal covers the upgrade of the HC3/3A transports to HC4/4A standard for operation by the Royal Navy's Commando Helicopter Force. The modernised helicopters will replace the service's Westland Sea King HC4/4+ aircraft, which are due to retire in 2016.
To be performed at the manufacturer's Yeovil, UK site, the modification work under the Merlin Life Sustainment Programme will include the addition of a folding tail and rotor blades, as well an upgrade of its avionics and cockpit to a new standard already used on the navy's enhanced Merlin HM2s.
The marinisation of the helicopters is believed to be a relatively straightforward process and will draw on the design work already performed for the HM2s and the AW101s operated by the Italian navy.
At present, 27 Merlin HC3/3As are listed in the RAF's inventory. It is thought that the MoD is still debating what to do with the two airframes not covered by the MLSP.
If confirmed, the contract will be a second major boost for Yeovil in recent weeks, with the confirmation on 19 December of an order from Norway for 16 search and rescue-configured AW101s.
The MoD declined to comment.