Rheinmetall Set to Secure F126 Frigate Contract in Q2 Amid Naval Push
Rheinmetall's Strategic Naval Expansion and F126 Frigate Programme
Contract Signing Expected in Q2
DUESSELDORF, Germany, May 7 (Reuters) - Rheinmetall could sign a contract to take over Germany's delayed F126 frigate programme in the second quarter, CEO Armin Papperger said on Thursday, further highlighting the company's growing focus on the naval sector.
"The biggest contract will be for sure F126, where we expect that in Q2 there could be a signing," Papperger said on a conference call after first-quarter results.
Financial Details and Due Diligence
Contract Value and Negotiations
His comments appear to confirm a report in the Financial Times on Wednesday that said Rheinmetall was seeking some 12 billion euros ($14.13 billion) from Germany to take over the program. Papperger said that the figure did not seem entirely incorrect.
Technical Due Diligence and Project Replacement
Rheinmetall has undertaken technical due diligence on the F126 deal that would see it replace Dutch shipbuilder Damen on the delayed project, said Papperger.
Role of Damen and NVL in the F126 Project
Delays and Potential Contractor Changes
The defence ministry has said Damen is behind schedule on the contract and that NVL, or Naval Vessels Luerssen, bought by Rheinmetall in March, could step in as general contractor.
Germany's defence ministry said on Wednesday that discussions on the frigates had not been concluded.
Broader Naval Sector Expansion
Recent Acquisitions and Bids
Rheinmetall is seeking to expand its naval activities after its recent acquisition of German warship maker NVL and earlier on Thursday said it had entered the race to buy shipyard German Naval Yards Kiel with a non-binding bid.
Exchange Rate Information
($1 = 0.8493 euros)
Reporting Credits
(Reporting by Matthias Inverardi, Writing by Madeline Chambers; Editing by Miranda Murray)
