Turkish Otokar to Pay Romania $46M for Delay in Armored Vehicles Supply

Turkish defense manufacturer Otokar will pay about $46 million in compensation to Romania after delays hit a major armored vehicle export contract, the company said in a filing to Turkey’s Public Disclosure Platform (KAP).

The compensation is linked to delays in the COBRA II tactical wheeled light armored vehicle program with Romania’s state-owned defense company Romtehnica, which covers the supply of 1,059 vehicles, worth around €855 million, as well as the establishment of local production in Romania.

Romtehnica has demanded around 1.88 billion Turkish lira ($43.5 million) in compensation, citing Otokar’s failure to complete interim targets related to local production preparations on time. Otokar said it has filed a lawsuit to annul the claim but has agreed to pay the amount according to a defined schedule while negotiations continue, reserving its legal rights.

In a separate claim, Romtehnica is seeking about 72 million lira ($1.6 million) over delays in the first batch of 194 vehicles produced at Otokar’s facilities in Turkey and delivered under the contract. Otokar said this payment is expected to be made in January, again without waiving its legal position.

Otokar said the total compensation, amounting to roughly 2 billion lira ($46 million), will be offset against its project receivables in 2025 and expensed. The company added that efforts are ongoing to prevent the dispute from affecting the continuation of the program or leading to additional compensation claims.

The company also disclosed that the compensation demands, first notified in December, were initially kept confidential to avoid harming negotiations and misleading investors. Otokar said confidentiality could no longer be maintained, prompting the disclosure.