Aerojet Rocketdyne Faces June Deadline for Taking RD Amross Stake
PARIS — Aerojet Rocketdyne, which is suffering from two separate headaches caused by Russian rocket engines, on April 9 said it is likely to decide by June 12 whether to exercise its option to buy a 50 percent stake in the company that sells Russian RD-180 rocket engines for use in U.S. Atlas 5 rockets.
Aerojet Rocketdyne’s parent company, GenCorp Inc. of Rancho Cordova, California — which as of April 27 is changing its name to Aerojet Rocketdyne Holdings — has been postponing a decision on the RD-180 since it bought the rest of Rocketdyne’s assets from United Technologies Corp. (UTC) in June 2013.
UTC owns 50 percent of RD Amross, a joint venture with RD-180 manufacturer Energomash of Russia. The RD-180 powers the first stage of the Atlas 5 rocket, which is used mainly for U.S. government launches.
The U.S. Congress, upset with Russia’s incursion into Ukraine and frustrated with U.S. dependence on Russian hardware to launch national security missions, has told launch service provider United Launch Alliance of Denver to find a U.S. alternative before the end of the decade.
The U.S. Air Force would like that deadline extended to account for new-engine development cycles, but otherwise agrees that the RD-180 engine must be phased out over time.
GenCorp and UTC agreed that GenCorp would withhold from the Rocketdyne purchase price $55 million that would have paid for UTC’s 50 percent stake in RD Amross. The Russian government, for reasons that have not been explained, has yet to give formal approval to the change in stakeholder, and this has been cited as a principal reason for the delay.
UTC and GenCorp agreed that the deadline for terminating the transaction — June 2014, a year after the Rocketdyne purchase — could be extended by up to four three-month increments. In an April 9 filing with the U.S. Securities and Exchange Commission (SEC), the company said it exercised the fourth of these in March. The deadline is now June 12.
GenCorp did not say whether it is negotiating a new RD Amross purchase price with UTC to account for the RD-180’s uncertain future on the Atlas rocket.
Years before the Rocketdyne purchase, the Aerojet portion of GenCorp had negotiated an agreement with Russian manufacturers to refurbish an old Russian engine and sell it to Orbital ATK of Dulles, Virginia, as the AJ-26.
A pair of AJ-26 engines powered Orbital ATK’s Antares rocket, used to deliver supplies to the international space station under contract to NASA.
Aerojet Rocketdyne had already been spending money to investigate an AJ-26 test-stand failure, and for the three months ending Feb. 28 it reported that this investigation had cost it another $1.9 million.
In October, Orbital’s Antares rocket failed seconds after liftoff, a failure that Orbital has said appears likely to have been caused by the AJ-26. Orbital has since stopped use of the AJ-26, booked a single launch aboard an Atlas 5 to meet its space station resupply contract commitment and signed with another Russian engine maker for a new engine to power the Antares vehicle starting in 2016.
Orbital has said in recent weeks that the Antares failure investigation is nearing completion, but company officials have indicated they are likely through with the AJ-26 no matter what the results.
GenCorp’s SEC filing said the AJ-26 contract was still active but that the October failure “may result in the termination of the AJ-26 contract and the company may face significant damage claims.”