South Africa said on Friday it had sold a 51 percent stake in defence group Denel's Airmotive unit to French company Turbomeca to create African-based firm Turbomeca Africa, which will manufacture and service helicopter engines.

Turbomeca, a subsidiary of state-owned aero engine maker was expected to pay the South African government about R30-million for the stake.

The deal is part of government's overhaul of the defence industry, which will also see BAE Systems getting around 20 percent of Denel Arospace and Britain's Pains-Wessex taking a minority stake in Denel's ammunition unit.

"The birth of this new company is in line with government's overall objective to develop our country and our continent," Public Enerprises Minister Jeff Radebe said.

The new company will manufacture engine parts for Turbomeca, General Electric, Rolls-Royce and Volvo, as well as repair and overhaul some types of Turbomeca, SNECMA and other engines.

Turnover for Turbomeca Africa would be an estimated R300-million to R400-million a year and the deal allowed Denel to introduce a black economic empowerment partner at some further stage, without diluting Turbomeca's holding.

With acknowledgements to Reuters and www.iafrica.co.za