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Claims: Ukraine to sell 50% stake in giant engine manufacturer Motor Sich to Turkish firm

T-SaGe

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4/13/2021 3:45:00 PM

Ukraine may sell a stake in engine-producing giant Motor Sich to a Turkish company, a local news site said, citing sources.
Chas News said the sale of some 50% stake in the Motor Sich, one of the world's largest engine manufacturers for missiles, airplanes and helicopters, to a Turkish company with a state share in the capital, was discussed between Ukrainian President Volodymyr Zelenskiy and President Recep Tayyip Erdoğan in Ankara.

The news site said that it was revealed by Chas News’ own sources in the government.

Zelenskiy paid an official visit to Turkey on Saturday for the ninth meeting of the Turkey-Ukraine High Level Strategic Cooperation Council.

Erdoğan and Zelenskiy then held a joint press conference in which the Turkish president urged the resolution of tensions near the Ukraine-Russia border through dialogue, adding that Ankara’s primary goal is to make the Black Sea region a basin of peace.
Motor Sich was already on the list of partners for the production of engines for Turkish drones, particularly the Bayraktar TB2 unmanned combat aerial vehicles (UCAVs) manufactured by Turkey’s Baykar. Ukraine currently has such drones in its inventory, while Kyiv previously reiterated its interest in purchasing more, as well as the production in its territory.

Back in October, a Ukrainian news site reported, citing the export and import body operating under Ukraine’s defense industry umbrella institution, that Kyiv plans to purchase up to 48 Bayraktar TB2s.

The report pointed out that since this is a fairly large purchase, there may be possibilities for the localization of production in Ukraine.

The head of Ukrspetsexport was cited in the report as saying, “Baykar Makina is ready to invest in Ukraine and develop joint projects.”

"This is a joint production, large-scale assembly on the territory of Ukraine,” Vadym Nozdri Nozdri said, emphasizing that the localization of the production would also “reduce the cost of each complex by up to 35%.”

Turkey’s heavy class attack helicopter Atak 2 will use an engine purchased from Ukraine as well, manufacturing company Turkish Aerospace Industries (TAI) said in March during a live broadcast.

Motor Sich is currently undergoing a period in which the Ukrainian government is trying to regain control over the company. The enterprise being putting under the management of the Ukraine’s defense industry umbrella institution Ukroboronprom was on the agenda as well.

On Jan 29, Zelenskiy sided with the U.S., signing a decree imposing sanctions on Chinese aviation firm Skyrizon, which has sought to acquire control of Motor Sich.

Washington has opposed Chinese investors acquiring the company and in the final days of the administration of President Donald Trump, Washington added Skyrizon to a Military End-User (MEU) List over its ability to develop military products, including aircraft engines, restricting its access to U.S. exports.

Ukraine’s sanctions block Skyrizon’s assets, restrict their trading operations and prevent it from moving capital outside of Ukraine for three years.

Skyrizon bought a majority stake in Motor Sich, but the shares were frozen in 2017 pending an investigation by Ukraine’s security service (SBU). The Chinese side brought a $3.5 billion arbitration case against Ukraine for blocking the shares.

Motor Sich severed ties with Russia, its biggest client, after Russia’s annexation of Crimea in 2014, and the wrangle over its future has held up efforts to find new markets.


The messages I wrote previously on this matter:
The last visit to Ankara by Ukrainian President Volodymyr Zelenskiy confirms Ukraine's desire to become a strategic partner of Turkey. Both sides noted the importance of cooperation in the military sphere, especially in such areas as turboprop and diesel engines, turbine engines and naval ships, avionics, developing of military drones, anti-ship and cruise missiles, radars and surveillance technologies, robotics, and rocket engines.

At the same time, the Turkish president is personally interested in the acquisition of Motor Sich.

Meanwhile, it is not yet known how Kiev intends to transfer the enterprise to Turkey, since the some shares of Motor Sich already belong to a group of investors from China. Also unknown is the US reaction to the future transfer of the enterprise to the Turks. Probably, a JV method such as Black Sea Shield, founded in partnership with Ivchenko Progress, or Lodos Propulsion, established in partnership with Zorya-Mashproekt, could be tried.

To overcome the US barrier for Motor Sich's funding and accumulation to become international, Chinese side, the Ukrainian side, and the Turkish side can work on a triple formula.
There is one thing that should not be forgotten: These companies were largely attached to the Russian defense industry. There was such a structure in the supply chain, and the primary user of these companies was the Russian defense ministry.

Following the occupation of the eastern part of the country and Crimea, It caused not only the important cities were captured by the separatists: At the same time, the Ukrainian heavy industry and related engineering activities were felt into deadlock.

To overcome the problem, Ukraine chose to align its existing military and aerospace production capabilities with western standards. Note that the new projects, especially Antonov, anticipate intensive integration with western suppliers. Turkish companies, especially Aselsan, will also play a critical role in this process. On the other hand, the potential market for these new products will be predominantly western users with infrastructure of these standards.

So the political problem with Motor Sich's inability to be transferred to China is not as superficial as you discuss here. The developments in the whole building are progressing in an articulation with each other. So the sale of Motor Sich is also indirectly related, to the healty future of Antonov's AN188 project for example. *(Turkey is the first country that showing interest to this project)
 
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Bilal Khan (Quwa)

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Turkey's literally doing everything all our 'ekspartz' were saying was impossible...

  • Commission several indigenous engine programs (TR Motor, TS1400, etc)
  • Gain sensitive IP by buying out entities like British Steel
  • Get reluctant parties like Ukraine to play ball by buying 50% of Motor Sich

@JamD @SQ8 a more salient point here is that the one who may end up buying 50% of Motor Sich is a by-product of Turkey's Fauji Foundation's investments.
 

JamD

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Turkey's literally doing everything all our 'ekspartz' were saying was impossible...

  • Commission several indigenous engine programs (TR Motor, TS1400, etc)
  • Gain sensitive IP by buying out entities like British Steel
  • Get reluctant parties like Ukraine to play ball by buying 50% of Motor Sich

@JamD @SQ8 a more salient point here is that the one who may end up buying 50% of Motor Sich is a by-product of Turkey's Fauji Foundation's investments.
This is obviously a very unpopular opinion here on this forum, but we should be really worried about India doing all of the same. They are in a good position to do so with regards to their existing foundations and their geostrategic realities.
 

Bilal Khan (Quwa)

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This is obviously a very unpopular opinion here on this forum, but we should be really worried about India doing all of the same. They are in a good position to do so with regards to their existing foundations and their geostrategic realities.
India can likely do it in Israel and the West (and to an extent they already are). For us, the issue wasn't so much that we didn't have access to the West (which we don't), but that we missed the apparent gold rush happening in South Africa, Ukraine, and possibly Brazil. You can only make due with what you have, but we ignored what we have...
 

Trango Towers

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Turkey's literally doing everything all our 'ekspartz' were saying was impossible...

  • Commission several indigenous engine programs (TR Motor, TS1400, etc)
  • Gain sensitive IP by buying out entities like British Steel
  • Get reluctant parties like Ukraine to play ball by buying 50% of Motor Sich

@JamD @SQ8 a more salient point here is that the one who may end up buying 50% of Motor Sich is a by-product of Turkey's Fauji Foundation's investments.
Americans will try and shuttle this deal. They have great influence in Ukraine especially with Russia knocking.
America also knows Turkish drones are world class and sales will impact American industry. If Turks gain access to complex engine tech they are free of the west
 
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Trango Towers

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India can likely do it in Israel and the West (and to an extent they already are). For us, the issue wasn't so much that we didn't have access to the West (which we don't), but that we missed the apparent gold rush happening in South Africa, Ukraine, and possibly Brazil. You can only make due with what you have, but we ignored what we have...
We are a area time nation. Sadly you just have to look at parliament to realise why
 

Hakikat ve Hikmet

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India can likely do it in Israel and the West (and to an extent they already are). For us, the issue wasn't so much that we didn't have access to the West (which we don't), but that we missed the apparent gold rush happening in South Africa, Ukraine, and possibly Brazil. You can only make due with what you have, but we ignored what we have...
Anyway, Pak has now Turkey building all the foundation blocks. Once ready Pak can quickly build up.....
Americans will try and shuttle this deal. They have great influence in Ukraine especially with Russia knocking.
America also knows Turkish drones are world class and sales will impact American industry. If Turks gain access to complex engine tech they are free of the west
The US has now a diminishing influence in the region. The US worships hasn’t entered into the Black Sea to show support for Ukraine! Every country is now for herself....
 

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