New Delhi: French aviation giant Dassault Aviation is set to increase its stake in Dassault Reliance Aerospace Limited (DRAL) from 49 percent to 51 percent, making the joint venture a subsidiary of Dassault Aviation.
ThePrint had reported in July 2023 that Dassault was exploring the possibility of buying out Reliance Defence stake in DRAL, which operates a manufacturing plant in Nagpur.
According to a statement issued by the company led by Anil Ambani Friday, following the transaction which is expected to be completed by November, DRAL will become an associate company, with Reliance retaining a 49 percent stake.
In an exchange filing, the company has stated that it will receive Rs 175 crore from the sale, based on an independent valuation.
The statement added that with the stake increase, Dassault Aviation will provide guarantees, warranties and service commitments for Falcon aircraft customers in India and globally.
Dassault and Reliance announced their joint venture and the creation of DRAL on 3 October 2016, barely two weeks after India signed a 7.878 billion euro deal for 36 Rafale jets in a flyaway condition.
The joint venture had initially planned to recruit and train 650 employees by 2022, with the eventual aim being the rollout of a complete Falcon business jet from Nagpur. However, the plans were in disarray back then because of reported financial trouble that Anil Ambani was facing.
Subsequently, Dassault now plans to set up its first Final Assembly Line (FAL) for Falcon aircraft, which competes with Bombardier and Gulfstream in the premium executive jet segment, at the MIHAN Special Economic Zone in Nagpur, Maharashtra.
In June, Reliance Defence had also bagged an export order worth Rs 600 crore from German arms manufacturer Rheinmetall Waffe Munition GmbH.
Incidentally, Rheinmetall had been blacklisted by the defence ministry in 2012 over corruption allegations and the ban was extended by another three years earlier this year, preventing the Indian Army from signing deals with the company. However, state-run Munitions India Limited sold nearly 500 tonnes of explosives to Rheinmetall in 2023 and early 2024.
(Edited by Tony Rai)
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