Cinven axes plan to sell Avio Space Stake
By Tom Kington
ROME — UK fund Cinven has killed plans to sell its control of Italy-based firm Avio Space — a key player in the fast-evolving European space sector — ending months of speculation about the firm returning to Italian control.
Cinven had nurtured plans to sell its controlling stake in Avio Space in 2013, with Italy’s state-controlled Finmeccanica seen as the likely buyer, while Safran and Airbus also made offers. But following the success of the firm’s Vega launcher for small satellites, Cinven has made a U-turn.
Defense News has learned that Cinven has opted to run the business, following a decision reached over the last few months
The decision makes the fund a protagonist in moves to keep Europe’s space launch sector viable as US private entrepreneurs such as Elon Musk show they can launch satellites more cheaply.
It also means Italy must rely on Cinven to keep Italian industry in the game.
After Italy’s Fiat sold Avio in 2003 to US fund Carlyle, Cinven bought it in 2006 before selling the firm’s aerospace activity to General Electric last year. But it held onto its 86 percent stake in Avio’s space activity. Finmeccanica holds the remaining 14 percent and reportedly had an option of buying Cinven’s stake.
The Italian government was expected to decide this summer what to do with Avio, which Rome considers a strategic firm. But no decision came as a new government focused on budget cuts in Italy and new Finmeccanica CEO Mauro Moretti began planning a restructuring of the group.
Meanwhile, a brace of contracts this year apparently persuaded Cinven not to sell. In February, Avio signed to launch the French-Israeli Venus satellite and the Italian military OPTSAT 3000 optical satellite acquired from Israel.
Last month, the European launch consortium Arianespace signed a €300 million (US $374.1 million) deal for 10 Vega launch vehicles with ELV, the private-public joint venture 70 percent controlled by Avio and 30 percent controlled by the Italian Space Agency. Arianespace has already used Vega for three launches.
Avio’s future prospects in Europe are even more interesting.
Avio’s Vega launcher operates alongside the Ariane 5 heavy satellite launcher and the Soyuz medium launcher in the family of launchers offered by Arianespace. On Dec. 2, European ministers with responsibility for space will meet in Luxembourg to plot a next-generation Ariane 6 launcher.
“Talks will cover the P120 engine being developed by Avio, which is set to be used in the new Ariane 6 rocket, as well as the C and E versions of the Vega,” said Roberto Battiston, the head of the Italian Space Agency. “The C version will also use the P120, allowing it to launch payloads close to 2 tons, up from the current 1 ton or more, while the E version will use new forms of propellent.”
The development of the new P120 engine in Italy would guarantee greater returns for Italian industry, but will require investment up front from the Italian government, which Battiston said needed to be decided ahead of the December meeting.
“The next few weeks will be crucial. If Italy is to take a planned 10 to 12 percent stake in Ariane 6, which will cost €8 billion over 10 years, it will need to invest up to €1 billion in the next 10 years, meaning up to €100 million a year.”
Uncertainty over that funding apparently made Avio a risky investment for Moretti.
Asked at this year’s Farnborough International Airshow whether he wanted to buy Avio, Moretti replied, “If there is a program of reference, yes. If there is no program, why should we invest?”
“Avio is a fundamental tool for planning launches and my preferred solution would have been Italian control, but the success of Vega has occurred while it was being run by Cinven proving that Italian ownership was not a prerequisite,” Battiston said.
Control by Cinven was better than Avio being taken over by Airbus and Safran, Battiston said, which formed a space joint venture in June.
“We should avoid monopolies, just as we are trying to face global competition from US private firms and China. Avio has efficiencies due to being a small, focused company.”
If the government finds the funds for Vega, it will likely form part of a package of funding also covering Italy’s investment in the International Space Station, a program for small satellites and the upgrading of Italy’s dual-use radar satellite program, Cosmo Skymed.
Four Cosmo Skymed satellites have already been launched, but Italy plans to send up two more, second-generation satellites. The cost would be €70 million a year for four years.
Battiston said the Italian arm of Italo-French joint venture Thales Alenia Space was depending on the Cosmo Skymed funding coming through.
Source : DefenseNews (Etats-Unis)
Relayé par : Nicolas Trussardi