Airbus carrying out due diligence talks on Spirit assets
Planemaker planning to carve up troubled supplier with Boeing
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Airbus CEO says Boeing financing deals reduce risk connected to completion of Spirit deal
By Tim Hepher
BRUSSELS, Nov 19 (Reuters) – The head of European planemaker Airbus said talks to finalise the takeover of part of troubled U.S. aerostructures supplier Spirit Aerosystems were going smoothly but that bringing it into Airbus would “not be a walk in the park”.
Airbus plans to take over the running of four Spirit plants associated with its A350 and A220 jetliner programmes as part of a loosely coordinated plan to carve up the company with Boeing , sensa 138 which is buying back almost all the rest of its former unit.
The rare act of cooperation between business foes reflects concerns that the rapid decline of one of the industry’s key suppliers, spun off from Boeing almost 20 years ago, could have spread havoc through the world’s largest planemakers.
Because the plants lose money, Spirit has agreed to pay $559 million to Airbus subject to due diligence and the shape of the deal, which could also include a fifth Scottish plant.
“My teams say the finalisation is going reasonably well…so I am quite optimistic on Spirit,” Airbus CEO Guillaume Faury told Reuters in an interview.
But the French CEO said tough tasks still lay ahead.
“We will have to go from signing to closing and then we will have to get our hands on it, and will have to do the ramp-up,” Faury said on the sidelines of a European industry event.
“There are plenty of problems to be solved. It is not a walk in the park but it seems that we are ticking the boxes one by one.”
Spirit did not respond to a request for comment.
The Wichita-based company this month issued a going concern warning, indicating doubts over its ability to pay its bills at some point in the next 12 months.
Already facing financial pressure, Spirit’s fortunes had taken a tumble after the blowout of a door plug on a Boeing 737 MAX in January, prompting the U.S. planemaker to offer to buy back the fuselage supplier for its most-sold jetliner series.
Last week, Boeing and Airbus agreed to advance Spirit a combined $457 million to keep it afloat while the three-way split is finalised. The plan must also win regulatory approval.
Faury’s remarks highlight the extent of Airbus’ concerns that contagion from the Boeing crisis could have reached its own operations via Spirit, which relies on Airbus for 25% of sales.
“The risk was not on our side. It was on Spirit’s side and even Boeing’s,” Faury said.
“The fact that Boeing was able to refinance itself is good news,” Faury said referring to Boeing’s $24 billion equity raise in late October, which analysts say put Boeing on an improved footing and removed potential distractions from the Spirit deal.
Faury said Boeing’s latest advance of $350 million to Spirit “is also good news for us; in theory that de-risks the signing for Airbus”.
Airbus agreed last week to advance $107 million to Spirit. (Reporting by Tim Hepher; Additional reporting by Allison Lampert in Montreal; Editing by Jamie Freed)