Raytheon completes RAC sell-off
Divestment Raytheon plans to use the proceeds of the sale of its Raytheon Aircraft (RAC) division to fund stock repurchasing and the early repayment of around $1 billion of debt. The company agreed the deal in December and last week completed the $3.3 billion sale to holding company Hawker Beechcraft, which comprises GS Capital Partners and Onex.
SAS plans BMI stake sale when deal ends
Strategy SAS Group is poised to dispose of its 20% shareholding in UK partner BMI once it is released from its loss-making joint venture at the end of 2007. SAS, BMI and Lufthansa have been partners in a risk-sharing joint venture covering routes from the UK to Scandinavia, Germany and some European destinations known as the European Co-operation Agreement, since 2000. SAS has previously said that its 20% BMI shareholding is a financial, rather than strategic, investment that it would be prepared to sell. A source says the pact makes the shareholding unattractive to potential buyers, effectively tying SAS into retaining the shareholding until the year-end, after which it will look to sell as soon as possible.
UK industry warns of funding shortfall
Technology The UK's aerospace industry is warning the government that its investment in aerospace technology is not delivering sufficient support to the National Aerospace Technology Strategy, a joint government, academia and industry initiative. The Society of British Aerospace Companies says government funding for civil aerospace will fall far short of the £70 million ($137 million) a year identified as necessary by the NATS, as part of evidence submitted to the House of Commons Trade and Industry Committee in response to the measures set out by Airbus as part of its Power8 restructuring plan. The SBAC says funding is forecast to rise to around £43 million in 2006-7, compared with around £20 million for the previous year, but it is not likely to rise further in the foreseeable future, leaving industry well short of its £70 million target.
Finmeccanica aims for international growth
Results Italian aerospace and defence manufacturer Finmeccanica is forecasting revenues of between €13.1 ($17.5 billion) and €13.7 billion for 2007, while earnings are expected to increase to as much as €1 billion. The company says it expects to continue growing internationally after taking measures "to resolve problems in some areas of activity, thus taking steps towards making them profitable again". Strong growth in revenues in 2006 (see graph) was largely thanks to progress in the company's civil business, including Airbus A380, Boeing 777 and 787 and Dassault Falcon work, as well as increased sales and production at ATR, Finmeccanica says.
Czech manufacturers team up
Merger Czech Republic-based Walter Engines is to merge with Avia OEM, another Czech manufacturer, according to a contract signed by FF Invest and Odien Capital Partners, owners of the two companies. Avia already supplies Walter with components. The newly merged entity will employ 530 people and expects its 2007 sales to hit CKr800 million ($38 million). Walter, which makes and repairs M601 turboprop engines used in 30 different aircraft types, was formerly known as Motorlet and counts Rolls-Royce, Snecma and ITP among its customers.