Simon Warburton/PARIS

The French Government is close to selecting a financial institution to handle the partial privatisation of engine and systems manufacturer Snecma.

Speculation has been rife in Paris as to the identity of the bank . Although Snecma chairman Jean-Paul Bechat refuses to shine any light on the issue, he concedes a decision is the first step towards releasing capital for further development of the company and its subsequent part in future European consolidation .

Bechat has made it no secret that he would like further consolidation within the European engine manufacturing arena and a limited entry onto the Paris stock exchange would release capital to help fund this. He adds: "Obviously if my shareholder decides to encourage us in pursuit of development and [therefore] the choice to participate in consolidation, this will help us in looking for allies."

The company has moved rapidly in recent years to grow its non-engines business, having acquired several concerns, most recently nacelles and aerostructures producer Hurel-Dubois, but has ambitions to broaden its horizons further. Talks with potential engine partners MTU, Volvo and FiatAvio were first recorded over 18 months ago and Bechat refers to the usual potential partners while adding Rolls-Royce to the list.

As yet it is unclear what percentage of the stock the government plans to release, although if previous aerospace privatisations are any guide the first tranche is likely to fall far short of 50%. But Bechat concedes that the process has to get under way if Snecma wants to be involved in meaningful pan-European consolidation: "There is always a certain mistrust [by others] in associating yourself with a company very heavily controlled by government so this [stock move] is a first step and if there is an acquisition to be made, then we can doit better."

Bechat says the recent US economic stagnation has not overly worried Snecma, which is a partner in CFM International and a risk-sharing partner in the GE-90family. In fact, Bechat insists the opposite is true. "Despite the recent results of US airlines we have not seen any [order] cancellations, although we are following the situation very carefully.

"Carriers have adapted capacity by removing noisy and thirsty aircraft and this is an important attraction for us," he says.

Snecma Group had a turnover for the 12 months to March 2001 of €5.7 billion ($4.8 billion), 16% up on the previous year, while net profits rose 23% to €318 million.

Meanwhile Snecma subsidiary Messier Dowty is in talks with the SHL division of Israel Aircraft Industries (IAI) over forming a joint venture to manufacture landing gear systems and hydraulic actuators. SHL already supplies nose and main landing gear for various airliners, combat aircraft and business jets and actuators for several Boeing aircraft. The Israeli operation recently moved into new facilities, at Ben-Gurion international airport, Tel Aviv and is hoping to increase its sales which this year are expected to total $60 million.

Source: Flight International