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EXCLUSIVE

Dassault in talks to buy out Reliance stake in DRAL

Move comes 2 years ahead of the planned roll out of Falcon 2000 executive jet from JV's Nagpur facility as part of Rafale deal offsets

February 19, 2020 By Vishal Thapar Video / Photo(s): By Dassault Aviation
Dassault's Make in India video released at DefExpo20

The French aircraft manufacturer Dassault is learnt to be in talks to buy out the stake of its partner Reliance in their joint venture Dassault Reliance Aerospace Limited (DRAL).

The Reliance-appointed CEO of DRAL Sampathkumaran ST has reportedly resigned recently. Reliance Infrastructure is the majority shareholder in the 51:49 JV.

This development has taken place two years ahead of the planned roll out of the fully assembled Dassault Falcon 2000 executive jet from the DRAL manufacturing facility at the Mihan SEZ in Nagpur as part of the scaling up of the discharge of offsets in the 7.87 Billion Euro Rafale fighter deal.

The Reliance-appointed CEO of DRAL Sampathkumaran ST has reportedly resigned recently. Reliance Infrastructure is the majority shareholder in the 51:49 JV

"Dassault is seeking a 100 per cent ownership of DRAL, as is permissible under Indian regulations. The French side is already handling all the manufacturing activity at DRAL," an informed source confirmed to this reporter.

Announced shortly after the signing of the Indo-French Government-to-Government deal for 36 Rafale fighters in 2016, the JV was intended to be "a key player in the execution of offset obligations" under the contract. The French side is to discharge 50 per cent offsets - or counter-trade obligations - by sourcing Defence and Aerospace equipment or components worth 3.9 Billion Euros from India.

"Dassault is seeking a 100 per cent ownership of DRAL, as is permissible under Indian regulations. The French side is already handling all the manufacturing activity at DRAL," an informed source confirmed to this reporter

"The Joint Venture also represents a unequalled Foreign Direct Investment (FDI) by Dassault Aviation of over 100 Million Euros, the largest such Defence FDI in one location in India," Dassault had declared in a statement.

The French aircraft manufacturer seeks 100 per cent control of DRAL before rolling out 2 Falcon 2000 jets a month

DRAL commenced manufacture of aero structures for the Falcon 2000 in 2018. "These first steps are expected to achieve in the coming years the possible setting up of final assembly of Rafale and Falcon Aircraft," Dassault had stated.

Sourcing by foreign OEMs of civil aerospace components manufactured in India are permissible for discharge of offsets in defence deals.

DRAL commenced manufacture of aero structures for the Falcon 2000 in 2018. "These first steps are expected to achieve in the coming years the possible setting up of final assembly of Rafale and Falcon Aircraft," Dassault had stated

In February 2019, the first cockpit front section of the Falcon 2000 produced by DRAL was delivered to the assembly line in France as part of the global supply chain for the manufacture of the bestselling executive jet.

"In parallel, larger infrastructures are being developed and will soon be completed allowing the ramp-up of DRAL capabilities toward the taking-off of an entire Falcon 2000 fully manufactured and assembled in India," Dassault had then declared in a statement.

A Falcon 2000 rollout will make this the first private sector assembly line for commercial jets in India.

Reports suggest that the French aircraft manufacturer plans to assemble two jets a month at Nagpur

In a video released at the recently-held DefExpo20 in Lucknow, Dassault declared that two more hangars are in the works in addition to the state-of-the-art 150,000 square feet Phase-1 facility, and that 600-700 personnel would be employed at the Nagpur facility by 2022 as part of the scaling up plans.

Reports suggest that the French aircraft manufacturer plans to assemble two jets a month at Nagpur.

In the meanwhile, Dassault has announced that it is now sourcing Rafale engine doors from Nagpur and pylons from Gurgaon.

After the publication of this report, Reliance put out the following statement: "The content of the story is completely baseless and false".