Santa Bárbara Sistemas (SBS) has taken an unexpected step by requesting the Supreme Court to halt the processing of its appeal against the granting of loans to Indra and Escribano related to the Special Modernization Program (PEM) for Self-Propelled Artillery. Specifically, the company is seeking a preliminary injunction to suspend €3 billion in zero-interest state loans, which were granted to the joint venture (UTE) formed by Indra and Escribano Mechanical & Engineering (EM&E).
Sources within the company have clarified to Europa Press that this request for suspension does not imply the withdrawal of the appeal, as reported by the newspaper Expansión. In other words, the legal proceedings are not being withdrawn, but rather paused while SBS continues its discussions with Indra. These negotiations, which SBS itself had previously announced, aim to promote integration within the sector, generate synergies, and leverage existing industrial and technological capabilities in Spain.
A game-changing approach
SBS's decision comes at a time of intense talks with Indra to create a joint venture that would allow both firms to combine their strengths for major land-based military contracts. According to industry sources, the discussions have progressed significantly since the change in Indra's top management, with Ángel Simón taking over as chairman from Ángel Escribano, and Josep Maria Recasens being appointed CEO in place of José Vicente de los Mozos. This change has eased tensions between the two companies, especially after Escribano publicly criticized the management of General Dynamics, SBS's parent company, in Spain.
The company has reiterated its willingness to make all its experience, immediate capabilities, and national intellectual property available to the Ministry of Defense . This gesture, along with the suspension of the appeal before the Supreme Court, represents an unprecedented rapprochement between two companies that until recently were at odds over the awarding of artillery programs, valued at more than €7.000 billion. However, the proceedings before the National Court, closely linked to the loan case, are still ongoing.
The context of loans and public financing
The loans claimed are outlined in the Royal Decree of October 14, 2025, which establishes the rules for the direct granting of loans for the industrial development of Special Modernization Programs (PEM). In total, the government has granted €14.224 billion in interest-free loans to various companies to pre-finance these defense projects. Of that amount, the programs in which Indra participates—either independently, with a partner, or through Hisdesat—account for €7.944 billion in public funding. Airbus's projects total €4.030 billion, including a €350 million program shared with Indra, while those linked to Navantia amount to €2.292 billion.
This volume of funding reflects the government's commitment to modernizing the country's military capabilities, but it has also generated tensions among industry players. The joint venture formed by Indra and EM&E received a significant portion of the funds, prompting SBS's initial appeal. Now, with the appeal temporarily suspended, an opportunity has arisen for negotiations between the two companies to solidify into an alliance that could redefine the defense industry landscape in Spain.