Embraer Surges Most in Two Weeks on Potential Colombia Aircraft Contract
By Alexander Ragir - Sep 1, 2010 10:20 AM GMT-0500
Empresa Brasileira de Aeronautica SA, the world’s fourth-largest plane maker, surged the most in two weeks after Brazil’s Defense Minister Nelson Jobim said Colombia may buy cargo planes.
Embraer, as the company is known, jumped 3.5 percent to 11.18 reais at 11:10 a.m. New York time. Earlier it rose 4.4 percent, the biggest gain since Aug. 18. The Bovespa stock index rose 2.5 percent.
Colombia and Brazil will sign a memorandum of understanding today, Jobim said in an interview in Brasilia.
“News of new possible contracts is always positive for the company,” said Juliana Vasconcellos Noe, an analyst at Agora Corretora in Rio de Janeiro. Contracts with defense ministries “is a new model the company is developing and there has been increasing interest in Latin America.”
Embraer said on Aug. 24 that it is in talks to sell six KC- 390 military cargo aircraft to Chile’s air force. The Sao Jose dos Campos, Brazil-based company said that the defense ministries of Brazil and Chile signed an accord through which the Brazilian company and Chile’s Empresa Nacional de Aeronautica will develop the aircraft in partnership.
Empresa Nacional de Aeronautica SA, Chile’s state-owned aeronautics company, may build parts for Empresa Brasileira de Aeronautica SA’s KC-390 military transport planes as part of an agreement signed last week by the governments of Chile and Brazil, El Mercurio reported.
The contract, which needs to be ratified, would be worth $600 million over 10 years, the Santiago-based newspaper reported, citing Enaer executive director Pedro Bascunan. Enaer signed two weeks ago a separate $100 million contract to build frames for Embraer’s Phenom and Legacy jets, El Mercurio said.
http://www.bloomberg.com/news/2010-09-0 ... tract.html
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