Pipavav to start join-venture with Airbus makers

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Pipavav to start join-venture with Airbus makers
Shares of Pipavav Defence and Offshore Engineering that was formerly known as Pipavav Shipyard. As per its filing with the Bombay Stock Exchange, the company announced, it is entering aviation sector. Pipavav has signed a pact with Airbus to set up an aircraft maintenance facility in the country through a joint venture.

The the memorandum of understanding (MoU) states, 'European Aeronautic, Defense and Space Co (EADS), the makers of Airbus, will pick up 26% equity in the project and has the option to increase it to 49%' said Pipavav in a regulatory filing.

In its filing on the BSE, the company also informed that it will hold 51% of the stake in the proposed joint venture. Its promoter, SKIL Infra, will also hold some stake in the venture.

It also said that in the first phase of MRO facilities and associated infrastructure are likely to cost US $100 million. And the MRO facilities and associated infrastructure will be used for civilian and military applications.

VIEW: On the fundamental front there are too many things are taking place and the company is foraying into a space where it has no prior experience. Therefore, it is a high risk company especially since it is newly founded.

For a technical analysts with investment horizon of few weeks, there fast STO is around 44 and hence the stock can be bought into. Although its MACD shows a negative trend and 7 DMA is above 20 DMA and 50 DMA.


Story first published: Thursday, September 29, 2011, 14:01 [IST]
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