July 11, 2018 / 10:45 AM / 5 days ago

Qatar to raise multi-billion dollar loan for Typhoon jets – sources

DUBAI (Reuters) - The government of Qatar is raising a multi-billion dollar loan for the purchase of Eurofighter Typhoon combat jets, two sources familiar with the deal said.

FILE PHOTO: A sign adorns a hangar at the BAE Systems facility at Salmesbury, near Preston, northern England March 10, 2016. REUTERS/Phil Noble

The financing, which according to one of the sources is around $4 billion, will be backed by export credit agencies.

Qatar entered into a 5 billion pound ($6.62 billion) contract with British defence group BAE Systems (BAES.L) in December last year for the purchase of 24 Typhoon combat aircraft.

“The new Typhoons will advance Qatar’s strategic efforts towards stability. The method and mechanism of payment has not been decided yet,” a Qatari official told Reuters.

BAE, Europe’s biggest defence contractor, said in December that the contract was subject to “financing conditions and receipt by the company of first payment, which are expected to be fulfilled no later than mid-2018”.

The Eurofighter Typhoon accounted for nearly a third of BAE Systems’ sales in 2016.

It is a joint project between BAE, France’s Airbus (AIR.PA) and Italy’s Leonardo (LDOF.MI), and supports an estimated 40,000 jobs in Britain.

In March, BAE also agreed to finalise talks with Qatar’s rival Saudi Arabia on a multi-billion pound order for 48 Typhoon aircraft.

($1 = 0.7555 pounds)

Reporting by Davide Barbuscia. Editing by Jane Merriman

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