French, German Factions Disagree Over Ways To Raise Cash

Things just aren't getting easier for EADS, or planemaker Airbus. In a meeting this week to set the agenda for an upcoming shareholder conference, French and German shareholders in the European consortium failed to agree on a controversial revenue plan.

The Financial Times reports the EADS board continues to bicker on the best way to raise as much as $5 billion in new revenue the group says it needs to push forth its Power8 restructuring plan for Airbus. That plan is expected to be a major talking point at the May 4 conference... but EADS reported Tuesday "directors could not finally agree a dividend proposal."

As Aero-News reported last week, French lawmakers have blocked advanced plans to bring a bond issue to voters. That led to a domino-effect at EADS, which is working to resolve production issues that led to Airbus' current state of fiscal turmoil.

The rift has exposed some longstanding conflicts between the French and German sides of EADS. According to the Times, three parties are divided on the issue -- the French government; French media group Lagardè¨re; and German automaker DaimlerChrysler.

The French sides control 22.5 percent of the company, combined. German interests hold an equal amount.

French lawmakers have pushed for an equity increase, while the Germans want to raise funds through a dividend offering against EADS stock.

Meanwhile, many investors have strongly suggested EADS hold off on any capital increase program, until Power8 takes hold and shares in EADS begin to rebound from current lows.

If the aerospace firm needs to raise money, investors add, it can do so by selling off assets.

FMI: www.eads.com, www.airbus.com