Finmeccanica: AgustaWestland and the decision of the Indian government


AgustaWestland, a Finmeccanica company, confirms that yesterday from the Indian Ministry of Defense both the notification concerning the appointment of the arbitrator within its competence, as requested by AgustaWestland, the 25 November and the 4 December 2013, and the notification of the interruption of the contract for the supply of 12 VVIP / VIP helicopters, in line with what was announced yesterday by a statement from the Indian Ministry of Defense.

AgustaWestland continues to believe that neither the Indian Ministry of Defense notification concerning the termination of the contract nor the show cause notice, from which it derives, are sufficient grounds to proceed against AgustaWestland. On the other hand, it was the Indian Ministry of Defense itself (with a press release dated February 14, 2013) to assert that the tender was carried out correctly. Accordingly, the contract termination notification received yesterday will need to be discussed in a solid and fair arbitration process. To this end, AgustaWestland will shortly propose a shortlist of names, with the aim of selecting the third Arbitrator, in agreement between the Parties, as requested by the Indian Ministry of Defense.

 AgustaWestland remains committed to working with the Indian Government to ensure that the Indian Armed Forces receive the helicopters they need and is ready to fulfill their contractual obligations in relation to the agreement for the supply of 12 VVIP / VIP helicopters. AgustaWestland will continue to support the three helicopters already delivered and currently in service with the Indian Armed Forces.

 Finmeccanica has long introduced stringent ethical procedures common to all Group companies that have harmonized their rules systems based on the standards set by the parent company. These procedures are regularly reviewed and have been further strengthened to meet the most stringent international ethical standards. AgustaWestland also applies the same strict procedures to prevent corruption in accordance with the updating of Finmeccanica policies.

 In any case, AgustaWestland is ready to implement the actions of a risk mitigation plan already prepared, in addition to the aforementioned initiatives related to arbitration. This plan includes a reduction in the workforce to redefine the company's business model and the reallocation of working capital, with impacts on the company's supply chain. The completion of this plan and the positive performance of the company, in addition to the orders recently obtained, will make it possible to achieve the operating conditions to guarantee profitability and adequate cash flow.

Source: Finmeccanica