Chris Jasper/LONDON

The new Aerospatiale Matra will take a charge of $300 million in its 1999 accounts as a result of a failed hedging strategy designed to protect it against fluctuations in value of the US dollar.

The timing of the hit nevertheless represents something of a victory for the French Government and Aerospatiale, since, had it been taken last year, the charge would have affected a cash payment to be made by Matra Hautes Technologies parent Lagardère as part of the merger settlement.

In dragging down Aerospatiale's 1998 result, the $300 million charge would have reduced Lagardère's anticipated Fr2 billion ($344 million) payment to the Government, which must be made in tandem with the handing over of Matra in return for the 33% holding Lagardère is to have in the expanded company.

Matra president Philippe Camus confirmed his acceptance of the timing of the charge in a recent address to analysts in Toulouse, adding that he understood why Aerospatiale, with its global exposure, had been forced to adopt a hedging strategy. He described it as "a good option, though it may appear expensive."

Source: Flight International