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Finmeccanica's AgustaWestland says Russia helicopter talks still on
August 20, 2013 / 5:32 PM / 4 years ago

Finmeccanica's AgustaWestland says Russia helicopter talks still on

The headquarters of Italian defence and aerospace company Finmeccanica is seen in Rome May 3, 2012. REUTERS/Max Rossi

MILAN (Reuters) - Italy’s AgustaWestland is still negotiating an order with the Russian government for its AW139 helicopters, a spokesman said after speculation about the order falling through hit the shares of parent company Finmeccanica SIFI.MI on Tuesday.

“The order is still under negotiation,” said Roberto Caprarella, a spokesman for AgustaWestland.

Earlier on Tuesday Russian news agency Itar-Tass had reported that Moscow would only consider buying 35 helicopters from AgustaWestland if the price came down.

“It’s a very expensive machine. If they cut the price, then we can return to the issue,” the agency quoted Russia’s Deputy Defence Minister Yuri Borisov as saying.

The Russian Defence Ministry declined immediate comment.

Shares in Italian defence group Finmeccanica fell to an 11-day low on the Russian news report, and closed down 5.22 percent at 3.96 euros, underperforming a 1.41 percent fall in Italy's blue-chip FTSE MIB index .FTMIB.

Analysts suggested an order of 35 helicopters of that model could be worth around 500 million euros ($671 million).

But AgustaWestland’s Caprarella said the value depended on various factors beyond the model, including equipment included in the aircraft and order-specific modifications that could significantly sway the final price.

The company has already sold around 730 of the AW139 helicopters around the world, he added.

Besides its manufacturing plants in Italy and the United States, AgustaWestland has also set up an assembly line plant in Russia to produce the AW139 for the market there and in the former Soviet republics.

The Russian plant is run by HeliVert, AgustaWestland’s joint venture with state-controlled group Russian Helicopters.

Finmeccanica faces other problems over AgustaWestland.

India’s federal auditor said last week it had found irregularities in the Indian government’s award of a 560 million euros luxury helicopter deal to AgustaWestland.

“It’s just another piece of bad news,” a Milan-based trader said.

Reporting by Agnieszka Flak and Elisa Anzolin in Milan and Thomas Grove and Steve Gutterman in Moscow; Writing by Agnieszka Flak

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