The program reflects plans supported by the government in France to help the automotive sector and intervenes as the aerospace industry seeks funding to help suppliers overcome the coronavirus crisis.
Aircraft production has practically stopped since the pandemic ended most trips, and many suppliers are in urgent need of cash.
If adopted, the new “Aerofund 4” will follow the heels of three similar industry packages dating from 2004 and represents the greatest effort to support one of France’s main export sectors.
Under the current proposals, four companies – the planners Airbus and Dassault Aviation, the engine manufacturer Safran and the avionics company Thales would contribute one-fifth of the fund’s € 1 billion target, the sources said.
But there have been differences over the best approach and no final amount has been agreed.
“It is under discussion; it’s not done yet, “said a source.
Lawmakers said the fund may hold 1 billion euros ($ 1.12 billion), but negotiations are underway.
The French aerospace industry association GIFAS, which coordinates the efforts of aerospace companies to support the supply chain, could not be reached for comment.
The proposed industrial contribution of € 200 million could be offset by the private equity fund Tikehau Capital, whose management unit ACE previously managed aerospace funds, although it has not yet been officially named.
Tikehau declined to comment.
French state-owned bank BPI could invest some 100 million euros, with the rest to be raised outside, one of the sources said.
BPI could not be reached for comment
The funds would be used to invest in small businesses or to support consolidation among small suppliers. But at least one of the large industrial firms is reluctant to encourage supply chain mergers, saying it is not its role, sources said.
($ 1 = 0.8913 euros)
Report by Elizabeth Pineau, Tim Hepher, Gwenaelle Barzic, Tangi Salaun. Editing by Jane Merriman
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