Bet Shemesh Engines Ltd. (TASE: BSEN) has initialed a follow-on agreement with German jet engine manufacturer MTU Aero Engines AG (DAX: MTX) to participate in the manufacture and sale of engines for use in the Dassault Falcon 7x corporate jet.
Over the next five years, Bet Shemesh Engines will invest $3 million to participate in the project to produce another version of MTU and Pratt & Whitney Canada Inc's PW307A engine used in the Learjet 86 made by Bombardier Inc. (TSX: BBD), which is due to enter service in 2013.
Bet Shemesh Engines currently has rights to 2.2% of revenue from the sale of PW307A engines and spare parts.
Bet Shemesh Engines will be eligible for 2.2% of revenue from the sale of PW307B engines and spare parts over the life span of the engine, which it estimates at 35 years. The company estimates its revenue from the PW307B project at $35-45 million over the next 20 years.
Clal Industries and Investments Ltd. (TASE: CII) owns 34% of Bet Shemesh Engines and company president and CEO Avner Shacham owns 25.5%. The company's core business is the manufacture and repair of jet engine parts for civil and military planes. The company's share price fell 0.2% today to NIS 8.53, giving a market cap of NIS 57 million.
Published by Globes [online], Israel business news - www.globes-online.com - on April 18, 2010
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