U.K. Halts Airbus Order Support on Reporting `Inaccuracies'

  • Planemaker says it's cooperating with export-credit agencies
  • National guarantees underpinned 7% of Airbus deals last year

Airbus Group SE temporarily lost export-credit funding after the planemaker informed U.K. regulatory authorities of “inaccuracies” in a number of applications, putting financial strain on some would-be purchasers.

U.K. Export Finance will halt support for Airbus until the planemaker provides “satisfactory” assurances over its dealings with “overseas agents,” the agency said in an e-mailed statement on Monday.

Airbus is cooperating with relevant export-credit agencies to re-establish the financing, which is used on less than 10 percent of its plane sales. The Toulouse, France-based company said that deliveries will be unaffected as it works to resolve the issue as soon as possible.

“The group believes that although some export-credit financing will be temporarily unavailable, the affected customers will be able to resume obtaining such financing or refinancing in the near future,” Airbus said in a statement late Friday.

Increased Scrutiny

The financing halt comes amid increased scrutiny of the role played by cross-border intermediaries in multinational deals. Monaco-based Unaoil SAM, which served as a go-between for companies and officials in the Middle East, Africa and former Soviet countries, was searched by authorities last week amid allegations of corruption.

Jefferies Equity Research estimates that export-credit agencies last year provided 7 percent of financing for Airbus plane deliveries, compared with 45 percent from leasing companies and 40 percent from airlines themselves.

“We understand why a bland announcement from Airbus may set nerves on edge as the use of third-party consultants or agents has generated some controversy elsewhere in the aerospace and defense sector, but our immediate layman’s response was that this is poles apart from allegations of bribery,” Sandy Morris, an analyst with Jefferies, said in a note.

Airbus were were priced 0.04 percent lower at 3:37 p.m. in Paris after trading as low as 1.6 percent. The U.K. Serious Fraud Office, which Airbus said hasn’t opened a formal investigation, declined to comment.

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