Shares in Türkiye's defense giant Otokar jumped 10% to the top of the BIST 100 index on Monday after the military and commercial vehicle manufacturer said it had been invited to Romanian military vehicle contract talks for a deal valued at $940 million (TL 32.20 billion).
Otokar, in a statement on the public disclosure platform (KAP), said on Friday it had been invited to contract negotiations for an armored vehicle procurement tender held by Romania, worth some $940 million.
The deal represents one of Otokar’s largest international contracts and bolsters its growing presence in the European defense market.
"In our special situation statement dated March 20, 2024, it was announced to the public that our company submitted an offer to the tender opened by C.N. Romtehnica S.A. (Romtehnica), a company of the Romanian Ministry of National Defense, for the purchase of 4x4 Tactical Wheeled Light Armored Vehicles," Otokar said in the KAP statement.
"Following the completion of the technical evaluation, field tests and commercial evaluation processes, the official invitation letter for contract negotiations was sent to our company by the tender authority," it added.
Furthermore, it disclosed that the tender amounting to 4,263,286,655.66 Romanian leu ($939.8 million) covers the supply of a total of 1,059 4X4 tactical wheeled light armored vehicles and some integrated logistics support services.
It added that 278 vehicles are set to be produced in Otokar facilities, and the remaining part in Romania, in a structure to be determined in the future.
"The signing of the contract and other important developments regarding the subject will be shared with our investors," the company said.
"This contract represents 82% of the company's revenue over the last four quarters, and it is expected to positively impact the company's operational profitability and stock performance," brokerage Halk Yatırım said.
Otokar’s relationship with Romania has been growing since 2018 when the company delivered 400 buses under a previous agreement. To support its increasing operations in the country, Otokar established a subsidiary, "Otokar Romania," to manage its contracts and collaboration with the Romanian government.