Finnish deal revives UAV co Aeronautics fortunes

The first 50 Orbiter mini-UAVs are about to be delivered to the Finnish Army.

The first delivery of 50 Orbiter mini unmanned aerial vehicles (UAVs) built by Aeronautics Defense Systems Ltd. in Yavne will be sent to the Finnish Army in a few days under a $30 million contract signed 18 months ago. Aeronautics will deliver 150 more Orbiters, to Finland in the coming months.

Aeronautics customized the Orbitor to Finnish Army specifications. Some of the systems on this Orbiter B2 version provide enhanced survivability in harsh environmental conditions. Every UAV has a day and night camera, intelligence gathering peripherals, communications, and other systems. In addition to the UAVs, Aeronautics is delivering dozens of customized command and control systems.

Completion of the Finnish Army deal, as well as two other smaller deals in the past few months, is good news for Aeronautics after a severe crisis. The company's cash flow problems caused payment arrears to suppliers and bank debts, and resulted in its takeover by private equity funds and the replacement of its founder and CEO Avi Leumi by Amos Matan, a former executive at Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT).

KCPS Clarity and Viola Private Equity own 75% of Aeronautics, the Shaked brothers own 14%, and private shareholders own 11%. Avi Leumi owns less than 1%.

A Finnish Army delegation visited Aeronautics' plant in Yavne last week to oversee the shipment of the Orbitors, which will be used in operations in the coming years. A source close to the company said that the Finnish Army is one of the company's anchor customers, and that the new owners invested heavily in rebuilding trust between the sides. "The company rebuilt the trust of important customers around the world and in Israel, covered all its debts to suppliers, and rescheduled its debts to the banks. There is a new atmosphere here of activity and creativity, and deals are on the horizon," the source told "Globes".

Natan, who took over as CEO eight months ago, after previously serving as CEO of Elbit Systems' artillery unit Soltam, has been keeping a low profile. Nonetheless, on Wednesday, he told "Globes", "We're working very hard, and 2013 was a good year for us, in which we resumed growth and budget breakeven. We've paid all our debts to our suppliers, and we're looking ahead to 2014. I believe that with all the problems and challenges facing the defense market because of budget cuts, we'll see further growth this year thanks to deals that we will announce."

Published by Globes [online], Israel business news - - on January 30, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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