ARIE EGOZI / TEL AVIV
The Israeli government plans to sell up to 20% of Israel Aircraft Industries (IAI) next year on the Tel Aviv stock exchange.
The plan has been discussed by treasury officials and IAI's management and will be considered by the government's privatisation committee in September.
According to company sources, IAI, Israel's largest aerospace and defence contractor, is worth $1.5-2 billion. IAI has previously tried to sell shares in Elta - a wholly owned subsidiary - but the plan failed in the face of union opposition.
IAI delivered a disappointing performance in the first half of 2003, reporting a net profit of $9 million, compared with $26 million in the same period last year. Sales fell 11% to $904 million, leaving IAI with an order backlog worth $4.5 billion at the end of June.
The company was hit by a sharp decrease in new orders in some defence systems divisions. An anticipated $1.3 billion contract to supply Phalcon airborne early warning systems to India is yet to be signed.
IAI's Bedek division suffered from a dearth of orders for commercial aircraft maintenance and conversions. Meanwhile, the civil aircraft division, manufacturing the Gulfstream G100 and G200 business jets, was hard hit by the slump.
While IAI's performance as a whole has disappointed, Elta has impressed. The defence unit earned $13 million in the first half of 2003 on sales up 22% to $237 million.
Source: Flight International
