By Adam Clark
Cobham said Tuesday that it has reached a settlement with Boeing over the KC-46 aircraft-refueling tanker program, which will lead the London-listed engineering company to take a 160 million pounds ($206.7 million) charge in its 2018 results.
Cobham said it has agreed to pay Boeing GBP86 million to settle the U.S. company's damages claims over the U.S. Air Force program. The agreement resets the schedule for the wing aerial refueling pod-qualification program, which is now expected to complete around the middle of 2020.
Boeing has agreed to release payments that it was previously withholding against Cobham invoices. Cobham said it will offset the damages against invoices worth GBP37 million, meaning it will make a GBP49 million payment in the first half of 2019.
Cobham said the "stringent" terms of the original KC-46 remain in place. The company has therefore also taken a non-underlying charge of GBP74 million in relation to the retained contract risks and the costs of the revised schedule, in addition to the GBP40 million charge it took last July.
Write to Adam Clark at firstname.lastname@example.org; @AdamDowJones