IAI to provide 2 communications satellites to China for $180m

The deal is further proof that Israeli defense industries are maintaining ties with China. Minister of Communications Reuven Rivlin will discuss Chinese-Israeli telecommunications relations in Beijing this week.

Israel Aircraft Industries's MBT (MABAT) - Weapon Systems and Space Technology subsidiary will supply China with two Amos civilian communications satellites, in a deal worth over $180 million.

IAI and Hong Kong Space Technologies will sign an agreement to supply the satellites tomorrow in Beijing's People's Hall. Ambassador of Israel to China Yitzhak Shelef, Minister of Communications Reuven Rivlin, and IAI MABAT division general manager Itzhak Nissan will attend the signing ceremony.

IAI will supply the first satellite within three years from the signing of the deal and the second shortly afterwards, by mid-2005. MBT is already building the first satellite at its facility at Ben Gurion Airport.

Israeli defense sources believe that the fact that the Chinese government agreed to buy an Israeli satellite – and moreover, one developed by IAI, which built the Phalcon – means that the cancellation of the Phalcon deal under US pressure has not completely eliminated the possibility of Chinese-Israeli defense deals.

As reported in ''Globes'' last week, after the cancellation of the Phalcon, IAI/Bedek Aviation group contracted with China Eastern Airlines to maintain its MD-11 fleet.

Rivlin will discuss Chinese-Israeli telecommunications business relations while in Beijing. The satellite project is completely civilian. Neither the satellites nor their support systems have any military elements. China will use them to broadcast the 2008 Beijing Olympic Games

This is the first export deal involving IAI's Amos satellite.

IAI today announced that MBT's orders backlog after the China deal was over $1 billion.

Published by Israel's Business Arena on 16 January 2002

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