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| Mahindra-NAL's private aircraft to be launched soon |
| BS Reporter / Mumbai Dec 09, 2009, 00:39 IST |
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Mahindra Aerospace, the aerospace arm of Mahindra & Mahindra (M&M), is readying the prototype of a small private aircraft built in collaboration with state-owned National Aerospace Laboratories (NAL). The five-seater, turbo-prop aircraft, NM5-100, will be flown by March. Its first flight was earlier scheduled in mid-2009.
This is the first time Bangalore-based NAL has ventured into developing small-sized private aircraft with private participation. The institution, responsible for the design of the NM5-100, had earlier worked on designs for the Hansa trainer and Saras, a light transport aircraft. M&M has earlier manufactured and delivered 24 five-seater aircraft for Jordan-based Seabird Aviation Jordan. The planes were manufactured by M&M at the rate of 3-4 units per month. Each plane cost $400,000.
According to the previous agreement, a substantial part of the design and development of the NM5 will be done by NAL, while marketing and serial production of the plane will be done by M&M. The central government had released Rs 6.5 crore for the project last year.
M&M is looking to secure aviation component supply contracts from major aircraft manufacturers around the world for military and civilian use. A senior executive from Mahindra Systech, the umbrella unit of the aerospace arm, said the component industry was worth more than $1 billion annually.
"We are in talks with an Australian company for a joint venture of a buy-out. We are looking for companies around the world which are into the business of aero components. We are ready for a technology transfer or a absolute buy-out”, said Hemant Luthra, president, Mahindra Systech.
Luthra also reiterated the group's plans of restructuring its auto components business, while bringing them under one company, Mahindra Systech, through a systematic consolidation plan.
There are three listed auto component manufacturing companies of the group, Mahindra Ugine, Mahindra Composite and Mahindra Forgings and two unlisted companies, Mahindra Gears and Mahindra Castings. In addition there are a number of subsidiaries overseas.
"Our view is that the market will not be interested in having small IPOs of $100-150 million companies. It is rather better to merge all these component making companies, keeping aside the aerospace division, as it will offer greater flexibility", Luthra added. He pointed out the group was working on various suggestions and that no concrete plan has been initialised.
"If this is the plan of the group then my understanding is that we should be able to achieve it in less than two years. It is not an easy thing to do as it will involve looking after the interest of many shareholders with their approvals", he further added. According to the group's plan, M&M may buy up to 65-70 per cent in a company and equate the balance of stake to a stake in Mahindra Systech to the target company. The stake offered to the target company may be based on value terms or on an agreement mutually agreed between the two parties. The stakes will, however, not be equal. Promoters of the M&M group may end up owning about 55-60 per cent in Mahindra Systech, which may be listed on the bourses, added Luthra.
An executive said Systech's turnover (including the aerospace segment) stands at $600-700 million, while the value of the company is pegged at $500 million. These figures were higher in 2008 (turnover at $950 million and value at $700 million) before the recession.
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