The French government is readying a billion euro strong fourth iteration of its Aerofund to support the countries aerospace sector with a key focus on protecting business that protect the supply chain.
According to Reuters four companies would stump up around a fifth of the fund’s €1billion euro target – Airbus, Dassault Aviation, Sarfran, and Thales – with an additional €100 billion from French development bank BPI to put in another €100 billion. There is also a €200 proposal from private equity firm Ticehau Capital with the remainder to come from as yet unconformed private sector sources.
No final decision has been made but if the fund goes ahead it would be the fourth of its type since 2004.
Nicolas Jouan, aerospace and defense analyst at GlobalData, said it was no surprise that France was providing financial help to the aerospace industry to face COVID-19 disruptions given it regularly tops European rankings in arms exports
According to Jouan the French aerospace sector is facing a number of COVID 19 related issues such as Airbus cutting the production rates of its main jetliners and Dassault’s first batch of Rafale delivery to the Indian Air Force reportedly at risk of delays.
“These difficulties are reflected in many other countries such as the US, where the Department of Defense already accelerated billions of dollars of payment to SMEs and individual players such as Lockheed Martin or General Dynamics granted millions in advanced payments to their suppliers,” said Jouan.
“Instead of advanced payment, the French initiative will provide funding opportunity to SMEs by joining private resources from top French aerospace companies and investment funds with tax-payer money. This will hopefully soften the bill for small businesses disrupted by the pandemic,” he added.