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Aero Vodochody up for sale

Aero Vodochody is to be sold in a public tender, the Czech ministry of industry has decided. BAE Systems and Elbit of Israel are among the companies that have already expressed interest.

The tender will be in two rounds, with price the sole decisive factor in the second one. The industry ministry says it hopes the privatisation will succeed because Aero has contracts to overhaul L-39 Albatros aircraft and owns an airport.

The government wants to sell the country's biggest aircraft manufacturer together with its debts. At present, the company owes the Czech state CKr5.5 billion ($236 million). If the privatisation fails, the government would file Aero for bankruptcy next January.

The industry ministry initially wanted simply to restructure the company, dividing it into military and civil businesses, with the state acquiring shares in a debt-for-equity swap. But this was barred by the Czech competition office and the European Commission. Aero ended 2004 in the black with a profit of CKr295 million, down from CKr313 million in 2003.

LUBOMIR SEDLAK/PRAGUE

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