Thursday, July 18, 2019
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BAE Systems says making progress on Saudi price talks

London: British defence firm BAE Systems is making progress on a deal with Saudi Arabia over the pricing for Eurofighter jets, its chairman signalled on Wednesday, a key milestone for the company.

“Watch this space,” Richard Olver told Reuters Insider in an interview when asked when investors should expect a resolution to price negotiations with the Saudis. “We’re always talking to our most important customers and Saudi is a very important customer,” he added, when asked if discussions were taking place this week.

Any development on the Saudi deal would be a boost for BAE, which is reeling from the collapse of a potential £6 billion (Dh36 billion, $10 billion) deal to sell 60 Eurofighter jets to the UAE late last year.

The company’s chief executive Ian King said it was unlikely that talks with the UAE over Eurofighter would restart, calling the negotiation “done”.

King said he remained positive on Eurofighter’s prospects elsewhere in the world, attributing the UAE’s withdrawal to the country’s conclusion that the deal could not be made within its budget and the required timescale.

The company’s relationship with the UAE was “very good”, added King.

The chairman went further, saying he was confident on BAE’s future prospects in the UAE.

“What happened was what we were talking about just wasn’t going to work at this moment in time, so we’ll continue talking with them. There’ll be other things that we’ll do and we can talk to them about … cyber, maybe we talk about unmanned,” he said, referring to other potential opportunities for the company.

Olver is due to step down as chairman at some point in the first quarter of this year and will be replaced by Roger Carr, former chairman of Centrica.

BAE’s shares, which lost around 5 per cent the day after the collapse of talks with the UAE over Eurofighter but have since recovered that value, traded down 0.1 per cent at 0948 GMT at 437.35 pence.