Rolls Royce Holdings PLC (LON:RR.) shares flew lower on Monday amid reports it had all but given up on winning the contract to design and build the engine for a new Turkish fighter jet.
The FTSE 100 giant had been working with Turkish industrial group Kale to bid for the contract which would have seen it form part of the team tasked with developing the TF-X jet – Turkey’s first indigenous combat aircraft.
But talks ran into problems last year over the sharing of intellectual property and the involvement of BMC – a Turkish defence contractor with links to the Qatari ministry of defence.
READ: Rolls flies lower as it withdraws from race to power Boeing’s new plane
Speaking to the Financial Times, chief executive Warren East said his firm has now “substantially ramped down” on the TF-X project and has started reassigning workers to other schemes.
“We’ve given what we believe is our best offer,” he told the newspaper.
“It is up to [the Turkish government] if they don’t want to work with Rolls-Royce and want to find another solution. We are not prepared to do anything further on that.”
One source told the FT that talks could re-start, but only if Turkey came back at a “very senior level”.
If that doesn’t happen, it would strike a blow to Theresa May and her government, who had lobbied hard for Rolls to win the deal.
This is the second contract tender the company has withdrawn from over the past week.
Last Thursday, Rolls-Royce pulled its bid to power Boeing’s new mid-size plane amid concerns that it might not have enough time to deliver a “sufficiently mature product”.
Shares fell 2.9% to 878.8p in late-morning trading on Monday.