June 3, 2020 |
US aircraft manufacturer backed out of $4.2 bln joint venture with the Brazilian company in April
Boeing has filed an arbitration claim against Brazilian aircraft manufacturer Embraer following the collapse of a proposed joint venture in April, according to a securities filing from Embraer on Monday.
Embraer previously filed its own arbitration claim, saying Boeing wrongfully terminated the agreement "in light of its own financial condition and 737 MAX and other business and reputational problems."
The Chicago-headquartered company said Embraer had not met the conditions of the joint venture when it pulled out of the deal, but it did not provide more details.
Spokespeople from Boeing and Embraer both declined to comment on ongoing legal matters.
Boeing and Embraer announced the deal in December 2018 under which Boeing would pay $4.2 billion for 80% of Embraer's commercial jet division and the two companies would form a joint venture to make and market the KC-390 military transport plane.
The Brazilian company is seeking to claw back the costs of carving out its commercial aircraft division as a pre-condition to the joint venture.
Embraer reported a net loss of $292 million in the first quarter this year as sales slumped on travel restrictions during the coronavirus pandemic and costs rose in preparation for the joint venture.
Press reports have named Commercial Aircraft Corporation of China (Comac), Russia's Irkut and companies from India as potential partners for the Brazilian company.
CFO Antonio Carlos Garcia said during the call that Embraer may seek new and existing sources of financing to reach at least $2 billion in liquidity and $1 billion in cash savings by the end of the year.
An Embraer spokesperson confirmed earlier this week the company is in talks with the national development bank BNDES and private banks in Brazil and abroad to finance working capital for exports, but did not provide further details.