The IPO deal foreshadows closer strategic co-operation in the world's fastest-growing aviation market
European Aeronautic Defence and Space (EADS) has pledged to take up 14.28 per cent of AviChina Industry & Technology's proposed H-share offer, in a deal that foreshadows closer strategic co-operation in the world's fastest-growing aviation market.
EADS, the world's second largest aerospace and defence firm with an 80 per cent stake in Airbus, will subscribe shares equivalent to 5 per cent of mini-vehicle and small aircraft maker AviChina's total issued share capital after its planned $1.52 billion to $1.93 billion initial public offering.
The two companies last Friday signed a strategic co-operation agreement under which they will join efforts in the development, manufacturing and upgrading of aviation products, including helicopters, regional jets and training aircraft. No concrete co-operative project has been agreed so far.
The investment is valued at between $217.11 million and $276.53 million, based on the indicative offer price of 95 cents and $1.21 per share.
EADS and AviChina have co-operated for close to three decades on helicopter manufacturing, including the EC120, a single-engine helicopter whose production also involves Singapore Aerospace.