EADS: Negotiations Are Ongoing

Earlier this week, the seven nations with a stake in the beleaguered A400M airlifter program sent a letter to EADS proposing a possible way to pay for the completion the aircraft, though all parties agreed not to release details of the scheme. The international news service AFP reports that a German defence ministry spokesman told reporters "The state secretaries last week worked to adopt a joint position on funding the project. This position will be communicated to the industry today and in the contract, countries confirm their binding intention to continue to support the project A400M."

EADS has responded to the letter with a statement of its own, which says it is too early to draw financial conclusions.

EADS confirms that it has received a letter from the customer nations of the A400M program summarizing the status of the negotiations and proposing a number of changes to the initial contract, the company said in a news release posted on its website.

"The letter is definitely an important step towards convergence, but it is not a contract draft; the company wishes to get further clarification on several items, and certain points are left open for later discussion. EADS will update the A400M provision in its 2009 financial statements. This update will require certain critical assumptions and financial assessments to be made that are not yet finalized. Therefore, EADS is at present not in a position to determine the level of the A400M provision it will need to charge in its 2009 accounts.

It is the clear intention of EADS' management and Board to determine a reliable figure for such provision and to communicate it to the market as early as possible."

FMI: www.eads.com