Finmeccanica to rebrand itself Leonardo

Call it Leonardo, Finmeccanica, Leonardo-Finmeccanica or AgustaWestland, but the name change will hardly matter in India, where it still spells 'Trouble' with a big T for some, and 'controversy' and 'scam' for most people tracking the choppy journey of the Italian aerospace and defence giant in the country.

Hogging the limelight in parliament, television screens and the front pages of newspapers, the Italian major is currently facing a barrage of negative publicity in India, where it has been accused of bribing politically powerful leaders in the former United Progressive Alliance (UPA) government, to bag an order for a dozen VVIP helicopters.

An Italian court concluded last month that the controversial company paid bribes of up to €30 million in India for the chopper deal. Perhaps stung by the charges, Finmeccanica, a high-tech industrial conglomerate, in which the Italian government has a 30-per cent stake, decided to go for a name change.

An extraordinary meeting of the shareholders overwhelmingly cleared a resolution changing the name of the company to Leonardo-Finmeccanica SpA till 31 December, and from 1 January 2017 to just plain Leonardo Spa.

A seven-month window has been provided for its foreign clients and other stakeholders to get used to the new name. Leonardo, the 15th century Italian polymath, was an inventor, scientist, engineer, mathematician, astronomer, painter, sculptor, architect, musician, writer and historian, among others, but is best remembered as the creator of the enigmatically smiling Mona Lisa.

Interestingly, Leonardo was also credited with devising the first concept for a helicopter. The new name ''defines the change of the company and its transformation from a financial holding company into an operational, integrated and innovative industrial entity,'' Finmeccanica said in  statement.

''Chosen for its strong evocative value, the new name is inspired by the figure of Leonardo da Vinci, universally recognised as a symbol of creativity and innovation,'' says the group.

Finmeccanica Helicopters, earlier known as AgustaWestland, came about following the merger in 1999 of the Italian conglomerate's helicopter subsidiary Agusta, with the chopper unit of Britain's GKN Westland. Five years later, the British group sold its stake in the joint venture to Finmeccanica. 

Over the years, AgustaWestland tied up with other international defence players including Russian Helicopters and Northop Grumann of the US in expanding its global presence.

The Italian conglomerate's troubles in India began in 2014 when the Indian government cancelled the deal to acquire a dozen AW101 helicopters for VVIPs after allegations surfaced about irregularities in the deal.

The Italian aerospace and defence group also has three other subsidiaries – Selex, Alenia and OtoMelara – operating in India. However, the AgustaWestland bribery scam is expected to singe the entire Italian group, which is being blacklisted.

Selex and OtoMelara supply radars and guns for the Indian Navy and the Coast Guard, while Alenia was hoping to replace the Avro fleet of the Indian Air Force.

The Indian government has also deferred a move by AgustaWestland to raise its FDI in a joint venture in the country to assemble helicopters.

CEO Mauro Moretti, who took over in 2014, has successfully overseen the restructuring of the Italian conglomerate, selling off non-core assets, paring down debt and improving cash flow. His efforts have paid off: the company's stock price has nearly doubled since he took over.

Earlier this year, Moretti admitted that Finmeccanica was difficult to pronounce and was not well-known globally. ''Nor was its heritage the best,'' he confessed, referring indirectly to the charges of bribery that have been flung against the group in the past.

''We are changing because we are switching from a holding to an operating company, because the new name gives a sense of Italian technology and because it is easy to remember,'' he told the media while presenting the results for 2015.

Unfortunately, it will take much more than a name change for the conglomerate to be accepted in India in the near future.