OEC 1.72% 29.5¢ orbital corporation limited

If true this is good news

  1. 6,931 Posts.
    From tha AFR.

    Russian Car Could Rev Up Orbital
    Peter Klinger

    Australian Financial Review
    Page 34
    Copyright of John Fairfax Group Pty Ltd

    Short of setting the world on fire, as it has promised for so long,
    Orbital Engine Corp is battling back from its recent lows.

    The embattled Perth company's share price gained another 1cents
    yesterday to close at 34cents, compared with 24.5cents less than a
    month ago.

    The share price improvement is modest, but the outlook appears
    encouraging, according to analysts who point to Orbital's attempts to
    rein in its cash-burn rate and speculation that automotive
    commercialisation of Orbital's much-lauded engines is on the horizon.

    Paterson Ord Minnett's Robert Gee is a long-time follower of the
    stock and rates Orbital a speculative buy. In a note to Paterson
    clients yesterday, he pointed to news that a major automotive plant
    in Russia that mass-produces low-cost cars and uses Orbital engine
    technology had secured project finance.

    If the report in this month's edition of Automotive News is accurate,
    the implications for Orbital are enormous.

    The Russian project was last mentioned by Orbital in its 2001 annual
    report, nine months ago. The car is to be powered by a 1.2 litre,
    three-cylinder, two-stroke engine supplied by Orbital. It is the same
    engine that Orbital uses in Australia in its Genesis program with
    Ford, which proved the engine's durability.

    The Russian project is headed by US automotive component supplier
    Venture Industries, which has sales of $US2.7 billion ($4.7 billion)
    a year.

    While production of the car is at least two years away, the potential
    rewards for Orbital are significant.

    Mr Gee has estimated up-front engineering fees for Orbital of
    $5million, a licence fee of between $5million and $10 million, and
    royalties and component supply margins equating to about $80 per
    vehicle. The plant is expected to produce 150,000 cars a year.

    ``Project finance is the key and confirmation will provide a
    significant boost to Orbital's share price,'' Mr Gee said.

    At the same time, there are also positive reports out of the US from
    Orbital's partner, Delphi Automotive Systems, in relation to direct
    injection technology, which are being interpreted as indications a
    deal may be in the offing.

    ``Whichever way you look at it,'' Mr Gee said, ``these are positive
    announcements for Orbital [and] hence the ongoing speculative buy

    Copyright © 2000 Dow Jones & Company, Inc. All Rights

    I have been trying to confirm that the money is now on the table for this project.


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