Samtel-Thales joint venture to manufacture avionic systems for fighter aircraft

09 May 2008

Electronics major Samtel Display Systems Ltd and French defence and aerospace major Thales have formed a joint venture to manufacture cockpit helmet mounted displays and a range of other high-end avionics for fighter aircraft.

Electronics major Samtel will hold a 74 per cent stake in the joint venture, with Thales holding the remaining 26 per cent in the joint venture, in line with the government's equity cap on foreign direct investment in the defence sector.

The joint venture will have an initial capital of $12.5 million with more investments to be pumped in as the joint development efforts progress, officials of the two firms said at a press conference.

The joint venture plans to invest Rs60 crore for the initial foray into cockpit helmet mounted displays and plans to step up funding as it takes up more projects.

The joint venture will help Thales discharge its off-set obligations in defence contracts. Under the offset clause of the defence procurement policy, a foreign company must generate 30 per cent of the value of products in the country.

For large projects such as the 126 multi-role fighter tender, the offset obligation will be as much as 50 per cent.