Piaggio Aero Industries´ aspirations to develop a new business jet are on firmer footing today as the Italian company announced it has further financial backing from a new investor.
India´s Tata Group, through its U.K. unit, has bought into the aircraft maker by purchasing existing shares and taking some made available through the issuance of new ones. It gives the firm a roughly 33% stake the in business aircraft maker. The deal, already approved by European regulators, makes the company effectively an equal partner alongside Mubadala, the United Arab Emirates-based investment company, and a shareholder group comprising the Ferrai and the di Mase families. The price of the deal has not been disclosed.
The board composition reflects the new power sharing agreement, with each shareholder having three positions. Each partner also gets to name a member of the executive management committee.
Day to day operations remain with the Italian management team, something enshrined in the governance agreement.
Piaggio is hoping to leverage the additional capital as well as strong business activities to help finance its roughly $ 1 billion effort to develop a business jet -- a long discussed ambition that has been short of the needed financing.
Tata´s involvement also should provide Piaggio access to the Indian market.
The Italian aircraft maker has seen strong aircraft sales on its P180 Avanti II, partly boosted by the recent spike in oil prices that have made the twin-engine turboprop more attractive than some jet rivals. The in-service fleet has now reached 161 aircraft, with a backlog of 106 Avanti II worth around $700 million. Production so far has reached 20 aircraft this year, with a target of handing over 10 more aircraft before year end. The goal is to boost output to 38 aircraft next year. The company is preparing the move to a new production facility.