In a statement Friday, the company said it had submitted a “proposed initial public offering of minority shares” with the US Securities and Exchange Commission, and hoped the process would be completed by the end of March.
“By retaining our majority shareholding, we intend to maintain significant exposure in this strategically important market, while continuing to enhance the relationships that have existed for all of Leonardo’s businesses,” Leonardo CEO Alessandro Profumo the word.
Leonardo said he had yet to determine what shares in the company would be listed, with press reports showing between 20 and 30 percent.
A mid-level defense electronics company supplying the US military, DRS lists its main product lines as sensing, electronic warfare, cybersecurity, network computing, communications, power protection, and electric power conversion and propulsion. Leonardo bought the company in 2008 for $ 5.2 billion, setting up a proxy agreement with the US government to allow the company to work on sensitive programs.
“A new proxy agreement is anticipated to be signed with the US Department of Defense to allow Leonardo DRS to continue competing and appearing on top secret programs,” Leonardo said in a statement.
An initial public offering would free up much-needed cash for Leonardo, who saw his debt rise in the first nine months of 2020 to € 5.88 billion (US $ 7.17 billion) from € 4.3 billion in the same period in 2019.
As for DRS, in the first nine months of 2020, the company saw revenues of $ 1.93 billion, up 6 percent year-on-year, driven by additional orders for the production of a new-generation U.S. Army mission command compute system and orders for propulsion control, panels and equipment for ships CVN 80 and CVN 81 for the US Navy.
In 2019, the New Jersey-based company had full-year revenue of $ 2.7 billion, up 17 percent year-on-year.