BAE offers UK government funding to Malaysia for Typhoon aircraft deal

KUALA LUMPUR (Reuters) – BAE Systems will provide Malaysia with a UK government-backed funding deal if it decides to replace its fleet of fighter jets with the Eurofighter Typhoon, senior company officials have said.

A Eurofighter Typhoon fighter jet flies vertically over a beach during an airshow in Torre del Mar, southern Spain, July 31, 2016. REUTERS / Jon Nazca

Malaysia has been weighing for several years the French Rafale and Eurofighter Typhoon, built by a European consortium including Britain’s BAE, with the aim of purchasing up to 18 jets to replace its Russian MiG-29s, most of which are nailed to the ground.

The competition, potentially worth more than $ 2 billion, is one of the largest combat contracts under consideration in Asia, although a decision has been delayed due to upcoming national elections and a change in Malaysia’s orientation towards improving aerial surveillance capabilities.

“We have an offer on the table … It is competitively priced and we have offered UK government funding so the Malaysian government can spread the payment over a longer period,” said Alan Garwood, director of group business development for BAE Systems, in an interview. in Kuala Lumpur.

“We can offer training, a local partnership and a lot of jobs, he added.

Funding would be provided through the UK export credit agency Export Finance.

BAE Systems, which leads the Typhoon’s regional sales campaign, is jointly built by BAE, the Italian Leonardo and Airbus. The company is looking to continue its regional momentum with the sale of its multipurpose fighter jet to Malaysia.

BAE believes Malaysia will come to a decision after the elections, which are due to take place by August.

“I feel there is an appetite to move forward in the next two years,” said John Brosnan, general manager of BAE Systems Malaysia and South East Asia.

“We would like to see progress made in the year following the elections … because governments tend to make these kinds of decisions a little earlier in their mandate than later,” he added.

The Malaysian economy has seen a recovery over the past year, after a few years of slow growth and a decline in the currency due to low oil prices.

“We believe there is a window of opportunity there with the strengthening of the economic position,” Brosnan said.

BAE is in competition with the French Dassault Aviation – builder of the Rafale – which was until recently considered to be the leader.

Prime Minister Najib Razak said in March last year that the Rafale deal was discussed during then-French President Francois Hollande’s visit to the Southeast Asian country, but that Malaysia was “not yet ready to make a decision”.

Dassault won a contract in 2016 to deliver 36 Rafale jets to India, and the company is still in talks to make additional sales to New Delhi.

Reporting by Praveen Menon and Tim Hepher; edited by Simon Cameron-Moore

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