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Mon 20 Oct 2008 01:43 PM

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Mubadala signs up for aircraft components deal

Abu Dhabi firm joins forces with Italian defence and aerospace company.

Italian defence and aerospace company Finmeccanica and Mubadala Development Co are forming an industrial partnership to make aerospace composite components for civilian aircraft.

Finmeccanica and Mubadala signed the agreement to create the partnership on Monday, according to a joint statement.

"Activities will begin this year and are expected to reach capacity by 2011," it said.

The components, including outboard flaps and horizontal and vertical stabilizers, will be made at a composites plant run by Mubadala in Abu Dhabi.

Finmeccanica shares were up 3.48 percent at 11.80 euros.

In a separate statement, Finmeccanica said Italy's government will subscribe to its planned capital increase, buying new shares worth 250 million euros.

The economy ministry, already a shareholder in the company, has committed itself to subscribe for 31,249,998 new shares at 8 euros apiece.

"Upon completion of this transaction, the Ministry of Economy and Finance will hold around 30.2 percent of Finmeccanica's share capital," it said.

The ministry's existing stake stands at about 33 percent.

The capital increase, approved by the company's board on Oct. 15, is aimed at raising up to 1.2 billion euros by issuing 152,921,430 ordinary shares to shareholders at a ratio of nine shares for every 25 shares held.

Finmeccanica needs the money to pay for its acquisition of U.S. defence firm DRS Technologies Inc. (Reuters)

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