EADS has joined forces with Embraer to bid for a stake in Portuguese aerospace company OGMA as part of a last-ditch attempt to convince Portugal to recommit to the Airbus Military A400M transport aircraft.

The European manufacturer says it proposed creating an Embraer-led joint venture to take a majority stake in OGMA, which is set for privatisation later this year. EADS sources say its involvement is linked to the Portuguese requirement for military transport aircraft.

Portugal wants to replace its ageing Lockheed Martin C-130s and also needs a medium tactical transport. The latter requirement could be met by the EADS Casa C-295.

Helicopter maintenance specialist OGMA could bid for workshare in the A400M if Portugal rejoins the €20 billion ($23 billion) programme by year-end. The Portuguese government is understood to be keen to conclude a quick deal with potential OGMA investors Alenia Aerospace, which is offering the C-27J medium tactical transport, is the only other known bidder.

EADS declines to reveal the level of its proposed investment in OGMA, which has debts of around €135 million. "Embraer gets a presence in Europe, while for us it brings in Portugal. All additional bases are welcome," says EADS. An OGMA joint venture would probably sit under the Military Aircraft division of EADS, the company adds.

Portugal withdrew from the A400M in May last year, citing lack of funds for its three-aircraft requirement. Airbus Military says several solutions were sought during the Portuguese government's three-month "cooling-off" period, but it was unable to create a business plan involving OGMA. The company says final work packages will be allocated by the end of the year. If Portugal were to order three aircraft, it would qualify for around €330 million of work, based on Flight International estimates.

"Any potential customer would be considered for workshare if they had an adequate aerospace industry," says Airbus Military.

OGMA was originally a risk-sharing partner in the programme, but failed to sign the final agreement in May 2003.

Lockheed Martin, meanwhile, says it is in "detailed negotiations" with Portugal on the C-130J, for which OGMA makes components.



Source: Flight International