Israel drone maker Aeronautics gets $232 million buyout offer

The news sent shares of Aeronautics up 37 percent in morning trade in Tel Aviv on Sunday. (File/AFP)
Updated 13 January 2019

Israel drone maker Aeronautics gets $232 million buyout offer

  • Aeronautics said it had agreed to hold talks with the potential buyers and committed to giving them exclusivity
  • The news sent shares of Aeronautics up 37 percent in morning trade in Tel Aviv on Sunday

JERUSALEM: Israel’s state-owned Rafael Advanced Defense Systems and businessman Avihai Stolero have offered to buy unmanned aerial vehicle maker Aeronautics for 850 million shekels ($232 million).
The news sent shares of Aeronautics up 37 percent in morning trade in Tel Aviv on Sunday. Aeronautics rejected a 430 million shekel offer from Rafael and Stolero last August.
Aeronautics, which had a market value of 507 million shekels on Jan. 10, said the latest offer for all its shares would be done as a reverse merger executed through a company jointly owned by Rafael and Stolero.
The company would become private and its shares delisted from the Tel Aviv Stock Exchange.
Aeronautics said it had agreed to hold talks with the potential buyers and committed to giving them exclusivity. Negotiations will take place until Feb. 15, during which time Rafael will conduct due diligence.
Earlier this month, state-owned Israel Aerospace Industries said it was in early talks to invest in Aeronautics.
In 2017, Aeronautics said the Defense Ministry had suspended the marketing and export license for one of the firm’s attack drones to a significant customer in a foreign country. The company denied any wrongdoing.
Israeli media reported at the time that the ministry had opened an investigation into Aeronautics over whether during a product demonstration in Azerbaijan one of its drones was used to attack a military position in the neighboring country of Armenia, and if so, who was at fault.
Aeronautics manufactures unmanned aerial vehicles for military surveillance and defense purposes, as well as for the commercial sector.


Saudi Arabia looks to cut spending in bid to shrink deficit

Updated 57 min 25 sec ago

Saudi Arabia looks to cut spending in bid to shrink deficit

  • Saudi Arabia has issued about SR84 billion in sukuk in the year to date

LONDON: Saudi Arabia plans to reduce spending next year by about 7.5 percent to SR990 billion ($263.9 billion) as it seeks to reduce its deficit. This compares to spending of SR1.07 trillion this year, it said in a preliminary budget statement.

The Kingdom anticipates a budget deficit of about 12 percent this year falling to 5.1 percent next year.

Saudi Arabia released data on Wednesday showing that the economy contracted by about 7 percent in the second quarter as regional economies faced the twin blow of the coronavirus pandemic and continued oil price weakness.

The unemployment rate among Saudis increased to 15.4 percent in the second quarter compared with 11.8 percent in the first quarter of the year.

The challenging headwinds facing regional economies is expected to spur activity across debt markets as countries sell bonds to help fund spending.

Saudi Arabia has already issued about SR84 billion in sukuk in the year to date.

“Over the past three years, the government has developed (from scratch) a well-functioning and increasingly deeper domestic sukuk market that has allowed it to tap into growing domestic and international demand for Shariah-compliant fixed income assets,” Moody’s said in a statement on Wednesday. 

“This, in turn, has helped diversify its funding sources compared with what was available during the oil price shock of 2015-16 and ease liquidity pressures amid a more than doubling of government financing needs this year,” the ratings agency added.