Sources inform ''Globes'' that Bank Hapoalim (TASE: POLI) will lend the Ministry of Defense €200 million for the procurement of 30 Italian Alenia Aermacchi M-346 jet trainers for the Israel Air Force in a €1 billion deal.
Bank Hapoalim declined to comment on the report.
Defense sources familiar with the subject confirmed that Bank Hapoalim and an Italian bank were involved in financing the procurement, and said that other financial institutions were also involved.
The structure of the financing will reportedly be as follows: the Ministry of Defense will provide €400 million, and a financial syndicate will provide €600 million. The syndicate comprises Italy's largest bank, Unicredit SpA (BIT: UCG; DAX: CRI) and Italy's largest pension fund Casa, which will jointly lend €400 million; and Bank Hapoalim, which will lend €200 million.
The financing will not be transferred immediately when the deal is closed, but in accordance with an agreement reached between the ministries of defense of Israel and Italy. The 20-year loans will bear 5% annual interest. Minister of Defense Ehud Barak and Italian Minister of Defense Admiral Giampaolo Di Paola are due to be signed within two weeks.
The Knesset Finance Committee today approved a NIS 6.3 billion binding authorization for the Ministry of Defense to move forward on the procurement of the jet trainers. The external funding was taken because the planes will be maintained by a special purpose company, Thor, a joint venture of Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) and Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1).
Published by Globes [online], Israel business news - www.globes-online.com - on July 17, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012