Julian Moxon/PARIS
THE FRENCH Government has told engine manufacturer Snecma to sell its controlling stake in its SEP rocket engine subsidiary to Aerospatiale, but the two state-owned concerns are at odds over the company's value.
Snecma president Bernard Dufour has told French economics minister Jean Arthuis that its 51.26% share is worth between Fr1.1 billion ($212 million) and Fr3 billion, the lower value reflecting the current share value, the higher taking into account other factors, such as SEP's outstanding business. Cash-strapped Aerospatiale, which is looking for Fr10 billion-worth of recapitalisation, says that it will pay just Fr500 million for the SEP stake. The remainder of SEP is publicly traded.
Valuing SEP is made no easier by the uncertain future for its hitherto lucrative space business. While 1995, according to president Roger Vignelles, was a "record year", the number of rocket engines it supplies for the Ariane 4 launcher is due to fall suddenly with the commercial introduction next year of the new Ariane 5, which uses just one SEP-supplied engine instead of up to ten for its predecessor.
The Ariane 4 has contributed around 77% of SEP's income in recent years, although Vignelles says that the company is preparing for the change by diversifying into other areas based around its carbon-carbon expertise.
Pushing SEP towards Aerospatiale is aimed at consolidating France's space-propulsion business in one centre. Aerospatiale is already prime contractor for the M51 ballistic missile and other French missiles for which SEP supplies the engines.
The Government also wants Snecma to hive off brake and hydraulics subsidiary Messier Bugatti, returning Snecma to its core engine business, in the hope that it will become profitable. US manufacturer BFGoodrich has drawn up a proposal for the acquisition, but a price has yet to be agreed. SEP itself was understood to be angling to take over the carbon-brakes business.
Source: Flight International