Banc Sabadell | Santa Bárbara Sistemas plans to appeal to the Supreme Court against the two major artillery contracts that the government awarded to Indra (IDR) and Escribano for €7.24 billion, according to press reports.
These two projects are fundamental pillars of the 31 Special Modernisation Programmes (PEM) promoted by the Ministry of Defence. We recall that Santa Bárbara has already filed an administrative appeal to try to suspend the €3 billion that both companies had received in loans at 0% interest to pre-finance these programmes.
Assessment: This is negative news that introduces uncertainty about Indra’s final participation in the PEMs. However, we will have to wait for the final resolution to see the potential impact. We recall that Indra, together with Navantia and Airbus, has been one of the main beneficiaries of the increase in defence spending announced last year.
