London — Swiss steelmaker Schmolz+Bickenbach (S+B) has lost a $420 million contract to supply the US Air Force with warhead bodies used in bunker-busting bombs and is considering an appeal, the company said Friday.
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The termination of the contract, under S+B's Finkl Steel business unit, had nothing to do with major shareholder Viktor Vekselberg, the company told S&P Global Platts. In April, the US Treasury imposed sanctions on a list of Russian oligarchs, including Vekselberg.
"We want to highlight that the US Government did not cancel the contract due to Mr Vekselberg's holding in S+B but simply because Finkl Steel is owned by a Swiss Group and therefore seen as a company under foreign ownership, control, or influence (FOCI). For us, this is a very important difference," a company representative said.
The financial impact of the lost contract is expected to be limited.
"There would be very little impact to the business because the award was not built into any forecast. Actual [revenue] from the award was expected to be minimal in 2019 and to begin ramping up in 2020. In parallel, we continue to pursue a number of additional growth initiatives in the defense sector as well as several other industries to drive the business forward," the representative said.
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--Edited by Jonathan Loades-Carter, firstname.lastname@example.org