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RABA WINS 15-YEAR HUNGARIAN ARMY TRUCK TENDER

14 Jan 03. Hungarian automotive group Raba (RABA.BU) won a Defence Ministry tender to supply some 8,000 all-terrain vehicles over the next 15 years, the company said today.

“The 15-year framework agreement…will raise military vehicle production to the level of third strategic business (within Raba),” Chief Executive Laszlo Steiner said in a statement released by the company on the Budapest Stock Exchange’s official website www.bet.hu.

The company did not reveal any details about the value of the contract. Raba set up a €30m joint venture with DaimlerChrysler (XETRA:DCXGn.DE – News) in 2001 for the development and production of military trucks and submitted a joint bid.

The all-terrain category of the tender covers vehicles with a passenger or cargo payload from one to 54 tons, Raba said.

It added that the framework agreement and the delivery schedule for 2003 and 2004 will be finalised in the coming weeks. The fact that deliveries would start this year as opposed to the company’s earlier expectations of 2004 would help Raba overcome a recession in the world’s truck market.

However, Raba would probably still be deeply in the red for 2002 despite the management’s streamlining efforts. The latest Raba figures showed 2002 nine-month sales falling to 30.56bn forints ($137.7m) from 40.8bn a year earlier and an operating loss of 1.89bn against a 1.26bn operating profit in January-September 2001.

Full-year figures are due by February 15 the latest but Raba issued a warning in December that in the fourth quarter alone its two main divisions would post another 1.5bn forints operating loss.

The Defence Ministry will hold a news conference on the result of the
tender at 1300 GMT.

The Budapest Stock Exchange suspended Raba shares for the day pending the outcome of the tender. On Monday Raba shares closed at 1,035 forints, up 55.

Comment: This is good news for DailerChrysler particularly as the truck range offered to Hungary is similar to the UK Future Cargo Vehicle bid; this will not have gone unnoticed at the DPA. MAN is still in the bidding process and well-favoured in some quarters whilst the outcome of the US FMTV bid in March may clarify the position with regard to the two US contenders Stewart & Stevenson and Oshkosh, which recently won the UK wheeled tanker requirement.

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