French government may lift restrictions on foreign ownership to attract GE participation
French finance minister Nicholas Sarkozy says that 35% of Snecma's capital will before the end of June be floated on the stock market, "which should raise €1.6-2 billion [$1.9-2.4 billion]".
The French state owns 97.2% of the engine and aerospace equipment group, while United Technologies of the USA, parent of engine manufacturer Pratt & Whitney, owns 1.7%. The remaining 1.1% is in diverse hands.
Jean-Paul B‚chat, who has been reappointed as Snecma's chief executive for a further three years, said earlier this year that Snecma's market value was estimated by banks at €5-6 billion. The government hopes the sale will help Snecma attract industrial partners. Snecma made sales of €6.43 billion in 2003, with net profits of €182 million, and expects matching sales and increased profits this year.
The group, which has been on the French government's privatisation list for nearly 11 years, was on the point of being partially privatised in the third quarter of 2001 when the process was put on hold after 11 September.
Sarkozy did not say whether foreign companies would be allowed to buy some of Snecma's shares, but the French government has said in the past that it was favourable to participation by Snecma's strategic partner GE Aircraft Engines. The pair are 50:50 partners in the 30-year-old CFM International joint venture.
The government is likely, however, to wait until the first phase of Snecma's introduction on to the stock market is completed before looking at potential participation by GE. The US company said last November that it was interested in buying up to 10% of the shares (Flight International, 25 November-1 December 2003).
GE Aircraft Engines chief executive Dave Calhoun said that holding more than 10%of Snecma "would be harmful" to their relationship.
Snecma says 3.2% of the shares to be put on the market are reserved for its employees, with the remaining 31.8% for institutional and private investors.
CHRISTINA MACKENZIE / PARIS
Source: Flight International
