BAE Systems says making progress on Saudi jets talks

British defence firm says in discussions with Gulf kingdom over pricing for Eurofighter aircraft
BAE Systems says making progress on Saudi jets talks
(AFP/Getty Images - for illustrative purposes only)
By Reuters
Wed 22 Jan 2014 02:33 PM

British defence firm BAE Systems is making progress on a deal with Saudi Arabia over the pricing for Eurofighter jets, its chairman signalled on Wednesday, a key milestone for the company.

"Watch this space," Richard Olver told Reuters Insider in an interview in Davos when asked when investors should expect a resolution to price negotiations with the Saudis.

"We're always talking to our most important customers and Saudi is a very important customer," he added, when asked if discussions were taking place this week.

Any development on the Saudi deal would be a boost for BAE, which is reeling from the collapse of a potential 6 billion pound ($10 billion) deal to sell 60 Eurofighter jets to the United Arab Emirates late last year.

The company's chief executive Ian King, speaking at a separate event in London, said it was unlikely that talks with the United Arab Emirates over Eurofighter would restart, calling the negotiation "done".

King said he remained positive on Eurofighter's prospects elsewhere in the world, attributing the UAE's withdrawal to the country's conclusion that the deal could not be made within its budget and the required time scale.

The company's relationship with the UAE was "very good", added King.

The chairman went further, saying he was confident on BAE's future prospects in the UAE.

"What happened was what we were talking about just wasn't going to work at this moment in time, so we'll continue talking with them. There'll be other things that we'll do and we can talk to them about ... cyber, maybe we talk about unmanned," he said, referring to other potential opportunities for the company.

Olver is due to step down as chairman at some point in the first quarter of this year and will be replaced by Roger Carr, former chairman of Centrica.

BAE's shares, which lost around 5 percent the day after the collapse of talks with the UAE overEurofighter but have since recovered that value, traded down 0.1 percent at 0948 GMT at 437.35 pence.

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