Germany wants stake in EADS, minus headaches
In the political minefield of national egos at the heart of EADS, the German government seems undecided about how best to shore up its interests without being left to foot the bill, should the aerospace giant’s finances deteriorate.
By Agencies |
FRANKFURT: In the political minefield of national egos at the heart of EADS, the German government seems undecided about how best to shore up its interests without being left to foot the bill, should the aerospace giant’s finances deteriorate.
The European Aeronautic Defence and Space Company insisted on Friday that it currently had enough cash to cope with the huge problems facing its crisis-ridden airplane maker Airbus. But EADS warned it might go to the debt markets next year in order to raise additional financing.
Group finance director Hans-Peter Ring said that EADS “will manage pro-actively its financial requirements and might go to the capital markets in ’07”, possibly by issuing hybrid bonds.
But the company, which has announced delays of up to 24 months in deliveries of the ambitious super-jumbo jet A380, “has neither the need nor the short-term intention” of making a capital increase, Ring insisted. Despite EADS’ insistence that it finances are very solid, such comments raised the spectre of potential financing bottlenecks further down the line.
And that could explain the government’s chronic prevarication as to how best safeguard German interests in the company.
After all, if the German state does acquire a stake in the company, it will be compelled to put up a large chunk of the financing should a capital increase ever become necessary.
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The crunch of the matter lies with German-US auto maker DaimlerChrysler, which holds a stake of 22.5% in EADS but has signalled its intention to reduce that stake to 15%. Berlin is adamant that the 7.5% stake being put for sale should remain in German hands and must not be allowed to fall into French or even Russian hands. It must “remain in the German sphere”, the government spokesman Ulrich Wilhem said recently.
The current balance of power with EADS is extremely delicate. Germany’s interests are represented by DaimlerChrysler’s 22.5% stake, while France is represented via a 30% interest shared by the state holding company Sogeade and media group Lagardere.
In September, Russian state-owned bank Vneshtorgbank bought 5.02% and Moscow has signalled its intention of increasing its say in the company.
Spanish interests are represented by the holding group Sepi, which owns 5.48%. Lagardere has committed itself to halving its stake to put French interests back on a par with Germany’s, but the balance of power would be upset if DaimlerChrysler were to reduce its stake.
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DaimlerChrysler chief Dieter Zetsche is opposed to the idea of the German state acquiring the shares. “Fundamentally, an increase in state influence is not desirable for the group,” he told the daily Frankfurter Allgemeine Zeitung. There is also opposition within EADS to the idea of state involvement.
The group’s German co-chief executive, Thomas Enders, said in an interview published in the Wall Street Journal that such a solution would mark a “return to the stone age.” But there are plenty of people in Germany, not least a number of top-ranking politicians, who argue that is the government’s patriotic duty to get its hands on the shares.
The group’s plane maker Airbus employs 22,000 people at seven different sites around the country. And the northern port of Hamburg is home to Airbus’ biggest German site. The government “has a crucial political responsibility” in the matter, the chief whip of the Social Democrat SPD party, Peter Struck, insisted.
A number of politicians have said the government should acquire the stake via the state-owned redevelopment bank KfW. Hamburg mayor Ole von Beust caused a stir last week when he said that a corresponding deal had been reached. But Chancellor Angela Merkel swiftly qualified that statement, insisting that no decision had been made yet.
But she added: “I’m not ruling anything out”. Economy minister Michael Glos insists that a future investor in EADS should come from the private sector.
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