Thu, Apr 12, 2007
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.
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