ST Aero takes a 35% stake in EFW

The cat is now officially out of the bag, and ST Aerospace has confirmed that there is more to the A330 P-to-F program agreement than was originally revealed in the MoU signed at the Singapore Air Show in February.

At that show, ST Aero and European aerospace giant EADS said they had agreed to launch a conversion program for the Airbus A330 family — including both the -200 and -300 variants — with ST Aero to lead the engineering development and most of the actual conversions to be done at the Dresden facility of Elbe Flugzeugwerke (EFW, EADS’ conversion and MRO arm). 

However, today ST Aerospace confirmed what has been something of an open secret in the industry for some time: that its participation in the venture will involve far more than just providing engineering services. Under the now-finalized agreement, ST Aero will take a 35% stake in EFW, for a total amount of of €110.5 million (made up partly in cash and partly in A330P2F engineering development work). The agreement, signed by ST, EADS, and EFW, also includes the following provisions: 

• EADS will continue to hold the remaining 65% of EFW
• Until completion of the engineering work, EADS will hold a call option on ST’s 35% stake
• EFW will be responsible for sales and marketing of the conversion program
• Entry into service of the first freighter-converted A330 is scheduled for 2016
• While most of the conversions will be done at EFW’s Dresden facility, some will be done at “a dedicated facility of ST Aerospace”
• EFW will serve as ST Aero’s European MRO center
• Subject to regulatory approval, engineering development will commence by the end of 2012

While nothing has been officially said about a launch order, we expect formal announcement of an order for up to twenty conversions by Qatar Airways at the Farnborough Air Show this summer.