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EADS Quashes Airbus Sale Rumors

Says It Needs No New Partners

Rumors of an investment by Persian Gulf interests for a stake in Airbus are false according to parent company EADS.

Media reports had EADS in advance talks with Dubai International Capital and Qatar Investment Authority for a direct stake in Airbus. Those same reports said EADS was courting investors from China, India, Russia and the US.

An EADS spokesman in Germany told Reuters, "I can deny that. We are not looking for a partner to invest in Airbus."

EADS directly owns Airbus since the UK's BAE Systems sold its 20% stake back earlier this year.

Despite the denials, French newspaper Le Monde says EADS IS considering those investors. It says EADS stock is in bad shape after the A380 fiasco and BAE's decision to pull out of Airbus. All of that leaves the European conglomerate $10 billion short on development funds for Airbus' A350 program. EADS has yet to approve a final design for that jet.

Airbus' woes with the A380 program have wreaked havoc across the Continent. A two-year program delay has cost the company billions. Worse, customers are starting to cancel orders for the superjumbo. That could spell disaster for Airbus which now estimates it needs in excess of 500 deliveries for the A380 program to recoup development costs alone. So far, Airbus has less than 150 orders.

The disaster sparked a major company restructuring that's already cost it one CEO. Christian Streiff stepped down after his plan met with disapproval at EADS.

As it stands, EADS is playing its restructuring plans close to the vest. That's understandable considering the political ramifications that will come from the inevitable plant closings and layoffs. The company seeks to restructure while causing the least political damage possible within its core investment countries of Germany, France and Spain.

Add to all of this renewed pressure from the US through the WTO to end European government subsidies of Airbus and it's not surprising speculation regarding EADS' search for investment money is running rampant.

FMI: www.eads.com

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