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. Last Updated: 07/27/2016

Aeroflot Negotiating Possible TU-204 Purchase

DAVOS, Switzerland -- The chairman of Egypt's Kato group said Monday he was negotiating with Russian airline Aeroflot on possible sales of the Tupolev-204s Kato has ordered from plane maker AO Aviastar.

"I think Aeroflot is about to place an order, and there are many other airlines that have expressed an interest," Kato chairman Ibrahim Kamel said.

"Once it begins to fly, I can assure you that this plane will have a very good response from the market," he said.

Kato has given Aviastar a firm order for 30 of the Tupolev-204s, which will have Rolls-Royce engines and avionics by U.S. firms Honeywell and Allied Signal.

The project is a bold initiative by Kato, which Kamel has developed into a diverse multinational group from a small family company specializing in trade and the food industry.

Kamel said he now expects Russian certification of the plane by the end of March and delivery of the first plane by the end of June.

He will seek further certifications, including in the United States, so that Kato can market it in China, the Middle East, Africa and in all of Europe, he said.

Kato is putting $100 million of its own money into the project but might need to raise this at a later stage.

Other sources of finance could include commercial banks, Britain's Export Credit Guarantee Department and the European Bank for Reconstruction and Development, he said.

Kato has an option for 170 more of the planes, depending on the market's response to the first batch.