ROME — Finmeccanica CEO Mauro Moretti has compared the debt-laden group he runs to Greece, claiming that in the state it is in, it will never be able to "be Germany."

In a frank speech about the Italian group's problems, Moretti said he had his work cut out as he undertakes a rationalization program.

Referring to Europe's biggest debtor country, as well as the continent's most virtuous economy, he added, "If one is in the situation of Greece, you cannot try to be Germany."

"You can tell fairy tales and say that we should be making acquisitions, but with what money?" he said.

Moretti made his comments on March 9 before the industry commission of the Italian senate, which had asked him to explain Finmeccanica's decision to sell its civil rail units to bring down its debt.

Last month, Finmeccanica agreed to sell rolling stock unit Ansaldo Breda and its 40 percent stake in signalling unit Ansaldo STS to Hitachi Ltd. in a deal potentially worth €1.9 billion (US $2 billion), that Finmeccanica said would cut €600 million euros from its €4.1 billion debt.

Discussing the firm's debt pile, Moretti repeated his doubts about Finmeccanica's purchase of US electronics firm DRS for $5.2 billion in 2008.

DRS, he said, was the most "exemplary case" of an overvalued acquisition, which lost more than $3 billion in value since the purchase while adding to Finmeccanica's debt.

In a January presentation to analysts, Moretti said Finmeccanica would seek a partner to help run its DRS, and was also planning to sell off activity at DRS worth €200 million in revenue in a bid to push it back to profitability.

The activities to be sold are DRS's Aviation and Logistics, as well as Training Communications and Network solutions units.

Addressing the Senate commission, Moretti also gave more detail about the management and industrial problems heencountered since taking over Finmeccanica in April 2014.

"We have many sectors with orders which are systematically at a loss from the moment we sign," he said, without giving examples. The firm's engineering sector "is often non-competitive and with high costs compared to competitors."

But he added that the rationalization program he introduced on his arrival at Finmeccanica last April was bearing fruit.

"Since my arrival the share price has doubled from €5.5 to €11, meaning it has been understood that something is moving," he said.

Email: tkington@defensenews.com.

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