Cobham Settles Air-Force Tanker Dispute With Boeing, Takes GBP160 Million Charge
19 February 2019 - 6:51PM
Dow Jones News
By Adam Clark
Cobham PLC (COB.LN) said Tuesday that it has reached a
settlement with Boeing Co. (BA) over the KC-46 aircraft-refueling
tanker program, which will lead the London-listed engineering
company to take a 160 million pounds ($206.7 million) charge in its
2018 results.
Cobham said it has agreed to pay Boeing GBP86 million to settle
the U.S. company's damages claims over the U.S. Air Force program.
The agreement resets the schedule for the wing aerial refueling
pod-qualification program, which is now expected to complete around
the middle of 2020.
Boeing has agreed to release payments that it was previously
withholding against Cobham invoices. Cobham said it will offset the
damages against invoices worth GBP37 million, meaning it will make
a GBP49 million payment in the first half of 2019.
Cobham said the "stringent" terms of the original KC-46 remain
in place. The company has therefore also taken a non-underlying
charge of GBP74 million in relation to the retained contract risks
and the costs of the revised schedule, in addition to the GBP40
million charge it took last July.
Write to Adam Clark at adam.clark@dowjones.com;
@AdamDowJones
(END) Dow Jones Newswires
February 19, 2019 02:36 ET (07:36 GMT)
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