Franco-German tank maker KNDS denies nationalisation reports

Franco-German tankmaker KNDS on Wednesday denied reports of discussions for a full nationalisation of the firm after it delayed a long-awaited stock market listing.

The maker of the Leopard and Leclerc battle tanks last month said it would delay its planned flotation, citing market volatility, putting what would be one of Europe's largest defence listings in years on ice.

Shares in prominent European arms makers such as Rheinmetall remain far higher than before Russia's full-scale invasion of Ukraine in 2022, but have pulled back in recent months in part due to investor concerns over the durability of increased defence spending in Europe.

The Handelsblatt daily -- citing German government sources -- reported that Paris and Berlin were considering jointly nationalising the firm.

In the wake of the report, KNDS Chairman Tom Enders said on Wednesday there was "absolutely no reason" for such a move.

"There are no discussions regarding full nationalisation of KNDS," he said in written comments.

"KNDS's financial situation is extremely sound with a massive order backlog. Working through KNDS's backlog as quickly as possible is the operational challenge for the coming years. Government control can't contribute to that."

Asked about the report, a German government spokesman on Wednesday pointed to Enders' statement but added only that "together with France, we want to shape the future of KNDS as future joint shareholders with equal rights".

Under the plans for the paused public offering, France and Germany would each hold a 40-percent stake in KNDS, with the remaining 20-percent available to buy on markets in Paris and Frankfurt.

Raising cash on the stock market would provide KNDS with new funds that it could use for investment and expansion.

"Our immediate priority remains the IPO, with the full support of the KNDS board of directors," Enders said Wednesday.

Created in 2015 by a merger between Nexter, then owned by the French state, and privately-held German firm KMW, KNDS also makes ammunition, artillery and armoured troop transports.

Currently, the French government owns half of KNDS with the rest controlled by the Wegmann family in Germany.

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