Brazil's Embraer sells fighter to Blackwater: report

SAO PAULO (Reuters) - Brazilian aircraft maker Embraer has sold one of its fighter planes to Blackwater Worldwide, the world's largest private defense services company that has been under investigation for killings in Iraq, a local paper said on Sunday.

Albeit modest in scale, the sale may be a coup in the competitive U.S. defense market for Brazil and Embraer, both of which have been attempting to carve out a niche in the lucrative global arms trade.

The deal between Embraer and Blackwater subsidiary EP Aviation is estimated at $4.5 million, the local O Estado de S. Paulo newspaper said, adding that the plane was registered with the U.S. Federal Aviation Agency under N314TG.

The sleek black and gray 314-B1 Super Tucano propeller- driven fighter, which resembles a World War Two P-51 Mustang, was flown from Embraer headquarters in Sao Jose dos Campos in February to a corporate airport in Elizabeth City, Virginia.

Blackwater President Gary Jackson's spokesman confirmed the sale of the aircraft and that it would be used in training exercises, the report said. The plane is the same as is used by the Brazilian Air Force, but the dual 0.50 caliber wing-mounted machine guns were removed, the report said.

The sale would have likely been cleared by President Luiz Inacio Lula da Silva and negotiated directly with the U.S. government as Brazilian law forbids selling military equipment to companies or for use in existing wars.

But Brazilian government officials and Embraer declined to comment on the record about the sale, according to report. Neither were available for comment on Sunday, when called by Reuters.

Blackwater, formed in 1997 by ex-Navy Seal Erik Prince and Al Clark, guards U.S. government personnel in Iraq, Afghanistan and elsewhere. It is under investigation by the FBI over the killing of several Iraqi civilians in a crowded Baghdad square in September 2007.

(Reporting by Reese Ewing, Editing by Maureen Bavdek)