The Swedish Agency for Non-Proliferation and Export Controls (ISP) has rejected the export license to CybAero’s unmanned helicopter system export to China.
CybAero signed a framework agreement with Chinese company AVIC for delivery of at least 70 helicopter systems in total, with at least 20 in the first three years and at least 50 the following five years.
CybAero applied for an export license from ISP on September 8 and supplemented its application on September 30 with a request for a license to deliver only the first 20 systems in the next two years.
On October 17, ISP announced that it will not grant the export license on the basis of CybAero's application.
Some of the questions ISP had include where the first 20 helicopter systems will be manufactured. CybAero is now talking with ISP and the company will submit a new application based on these discussions with a clearer description of its framework agreement with AVIC, as well as the production and use of the systems. The systems will only be used for civilian applications, such as power line inspection, environmental condition monitoring, surface mine inspection and similar applications.
“Our original export license application was for all 70 helicopter systems, but we only applied for the first 20 in the supplement submitted in September, since ISP can only grant licenses for a maximum of two years at a time. We believe that the process of having submitted an initial export application and then a supplement may have led to uncertainty resulting in ISP's decision to not grant the application," says Mikael Hult, CEO of CybAero.
“We will therefore submit a new, clearer application this week."
ISP's decision is without a doubt a bump in the road for CybAero's plans, but since the first deliveries to AVIC are planned for Q2 2015, there is time to clarify the export license application.
“In the meantime, we will continue with our marketing, both in China, where we will participate in a trade fair in November, and in other markets," says Mikael Hult.
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First North-listed CybAero, which develops and markets unmanned helicopters, has performed demo flights on location for its major Chinese customer AVIC, which signed a framework agreement with CybAero this summer with an order value of SEK 700-800 million. The news comes only days after Swedish Defence Minister Karin Enström has demanded an explanation from the general director of the state-run FOI defence research institute, over an alleged weapon's co-operation with China, according to Radio Sweden
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