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Oct 06, 2020 14:09 EEST
October 6 (SeeNews) - Romanian aerospace company Romaero [BSE:RORX] has become a global supplier of components for the Patriot air and missile defence system, U.S.-based defence contractor and industrial corporation Raytheon Technologies said.
Raytheon Missiles & Defense, a division of Raytheon Technologies, sent the first order for Patriot components to Romaero, the U.S company said in a statement on Monday.
The industrial collaboration between the two companies will allow Romaero to deliver components for both Romania and the other 16 nations that rely on the Patriot system to ensure their integrated anti-aircraft and anti-missile defense, Raytheon Technologies said.
"Raytheon Missiles & Defense is committed to supporting the local industry. This partnership encourages the further development of a strong Romanian industrial base and will have economic benefits generated by current and future orders," Raytheon Missiles & Defense requirements and capabilities executive Mike Ellison said.
The purchase order involves the production of mechanical assemblies that will be included in the final construction process of the Patriot radar. Starting with the delivery of this order, Romaero will have the opportunity to receive subsequent orders from all Patriot countries.
"Romaero creates jobs and attracts orders that will be fulfilled in Romania," Romaero CEO Vasile Boicu said in the statement, adding that the partnership with the U.S. manufacturer not only provides an opportunity to maintain the systems purchased by Romania, it gives Romaero the opportunity to provide support for many countries worldwide that have over 240 Patriot firing units installed in total.
The 16 states that have purchased the Patriot system besides Romania are the U.S., the Netherlands, Germany, Japan, Israel, Saudi Arabia, Kuwait, Taiwan, Greece, Spain, South Korea, United Arab Emirates, Qatar, Sweden, Poland and the Kingdom of Bahrain.
"This proves that there are opportunities for the experience, expertise and tradition of the Romanian national defence industry in an extremely competitive global market, in which these systems have a high added value," Romania's economy, energy and business environment minister Virgil Popescu said.
In September, Romania received the first Patriot surface-to-air missile (SAM) system from Raytheon, and is expecting three more by the end of 2022, the defence ministry said. In November 2018, Romania signed an agreement with Raytheon to buy three additional Patriot systems, bringing the total number of purchased systems to ten. A year earlier, the U.S. State Department cleared the sale of seven Patriot systems to Romania by Raytheon for an estimated $3.9 billion (3.3 billion euro).
Established in 1920, Romaero is an aerospace company that integrates two major activities: aerostructure manufacturing and maintenance and repair for civil and military transport aircraft. It is located near Bucharest's Baneasa Airport and employs 900.
Its main shareholders are the economy ministry with 56.71%, SIF Muntenia investment fund with 23.24% and Fondul Proprietatea with 18.87%. In 2016, the shareholders drafted a reorganization plan for Romaero in an attempt to limit financial loss.
In August insolvency manager CIT Restructuring announced that Romaero will borrow 60 million lei ($14.7 million/ 12.5 million euro) from local state-owned CEC Bank to finance a large-scale restructuring plan. Some 45 million lei from the loan will be used to pay debts to the national fiscal agency ANAF, while 14 million lei will be used as working capital in order to relaunch operations.
Romaero's shares traded flat at 26 lei on the Bucharest Stock Exchange's alternative trading segment AeRO as at 1207 CET on Tuesday.
Romania, which joined NATO in 2004, plans to spend 9.8 billion euro until 2026 to boost its defence capabilities.
(1 euro=4.8742 lei)
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