Agreement reached on A400M military plane costs
AFP - European aerospace giant EADS has accepted a proposal from seven partner governments to finance cost overruns of 5.2 billion euros (7.1 billion dollars) on the A400M military transport plane, French Defence Minister Herve Morin said on Thursday.
"We received a response yesterday night from EADS to the letter sent a few days ago by the participating states. There are no more financial demands on the part of EADS," he said at an informal meeting of EU defence ministers.
The seven NATO nations -- Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey -- had offered a total of two billion euros in additional financing as well as an additional 1.5 billion euros in credit guarantees.
To cover the rest of the cost overrun, EADS will book another 1.7 billion euros in charges on top of the 2.4 billion euros it has already booked. Last week EADS said it was ready to book only 800 million euros in additional charges.
Before the deal is finalised, EADS wants to ensure that the seven nations do not sharply reduce their orders for the aircraft, Morin said.
The seven nations ordered 180 of the highly innovative planes which can carry troops, armoured vehicles and helicopters for 20 billion euros (27 billion US dollars).