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Embraer, Portugal in talks for defense plane order

Published 09/10/2010, 03:23 PM
Updated 09/10/2010, 03:28 PM

* Embraer, Portugal's government sign letter of intent

* Potential order from Portugal seen at 6 cargo planes

* Chile, Colombia signed similar deals in past month

SAO PAULO, Sept 10 (Reuters) - Brazilian aircraft maker Embraer signed on Friday a letter of intent with Portugal's government to help develop a military transport plane, the fourth such agreement in two months as the company seeks to diversify away from regional commercial jets.

As part of the deal, Portugal's government could order six KC-390 planes -- as the cargo plane is known -- from Embraer , the Brazilian company said in a statement.

Embraer, based in Sao Jose dos Campos, said it has also started talks with Portuguese companies to help develop and build the new cargo plane.

Embraer has signed deals with the governments of Chile and Colombia and with Brazil's Air Force since late July, putting potential orders so far for the KC-390 at 52. The military plane, which is expected to operate as early as 2015, has a cargo capacity of 23.6 tonnes.

Embraer got about 13 percent of its revenue in the second quarter from the defense segment and 61 percent from commercial planes.

Embraer shares rose 1.2 percent to 11.43 reais in late-afternoon trading in Sao Paulo, compared with a 0.09 percent gain in the benchmark Bovespa <.BVSP> index.

(Reporting by Elzio Barreto; Editing by Bernard Orr)

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