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15 Sep, 2006 04:57

EADS Resists Russian Blocking Stake

EADS Resists Russian Blocking Stake

European aerospace company EADS says it will not change its corporate governance rules to allow Russia to hold a blocking stake. The announcement comes days after Russia bought a 5.02 percent share and expressed interest in acquiring a decision-making rol

EADS makes Airbus, as well as defence and space equipment.

The two co-chairmen Arnaud Lagardere of France, and Manfred Bischoff of Germany, have said while Russian cooperation is welcome, enlarging the group of industrial shareholders would not be in the company’s interests.

Russia’s shareholding may already present EADS with a problem in attracting larger US military contracts.

The discussion surrounding EADS is likely to be one of the topics of a Franco-German-Russian summit in Paris on the 23rd of September.

Analysts say Russia’s purchase of an EADS stake is part of a plan to increase its political and economic clout in the world.  The purchase also supports the government’s policy to revive the domestic aerospace industry. Analysts say the EADS stake is likely to be handed over to the United Aircraft Company that is charged with consolidating Russia’s plane builders.

National carrier Aeroflot is also looking to increase its fleet with a $6 billion order from Airbus and Boeing