Embraer nears sale of five military cargo jets to Portugal-sources …
By Rodrigo Viga GaierRIO DE JANEIRO, June 13 (Reuters) - Embraer SA <EMBR3.SA>expects to reach terms on the sale of at least five KC-390airlifters to Portugal within three months, landing the firstforeign order for the new plane with a NATO member country, twopeople familiar with talks said on Tuesday. The Brazilian planemaker is in negotiations that are invarious stages with around ten countries, including Sweden andNew Zealand, for the military cargo jet, according to thesources, after six nations showed formal interest during earlydevelopment. The Brazilian Air Force has ordered 28 of the aircraft for7.2 billion reais (£2.2 billion), with two deliveries set for2018 and three in 2019.
Among foreign governments, talks with the Portuguese are themost advanced after Lisbon authorized negotiations for fiveKC-390s, the sources said. One said there may be an option for asixth KC-390 focused on domestic firefighting missions. Common shares of Embraer rose 0.6 percent to 15.75 reais inSao Paulo trading, trimming year-to-date losses to 0.5 percent. "Embraer does not comment on potential sales," the companysaid in a statement.
The new cargo jet represents a bid by Embraer to take a biteout of a military transport segment long dominated by theworkhorse Hercules C-130, made by U.S. aerospace firm LockheedMartin Corp <LMT.N>. Embraer has previously forecast a market worth over £50billion in the coming decades to replace more than 700 olderHercules aircraft, some of them in service since the 1960s. Portugal, a founding member of the North Atlantic TreatyOrganization, was one of the first countries to express interestin the KC-390 in 2010, along with Argentina, Brazil, Chile,Colombia and the Czech Republic.
Embraer's Portuguese subsidiaryOGMA has helped to build the jet's fuselage and other parts.
Chief Executive Paulo Cesar Silva said last month he was"very confident" Embraer would get its first KC-390 order fromoutside of Latin America this year.
In April, Embraer's defense unit head Jackson Schneider saidthe KC-390 could yield the company £1.5 billion in annualexports once the jet enters service next year. [nL2N1HD0RH] (£1 = 3.32 reais) (Writing and additional reporting by Guillermo Parra-Bernal andBrad Haynes; Editing by Bill Rigby and Bernadette Baum) (([email protected]; +55 11 5644 7725; Reuters Messaging:[email protected]))Keywords: EMBRAER KC390/