The state will sell Aero to Oakfield — a division of the Penta investment group — for 2.9 billion Kč ($129 million), acting Prime Minister Mirek Topolánek said after a Cabinet meeting Oct. 25.

"We are aware of the possible risks," Topolánek said. "They are acceptable with regard to the company's history."

Aero Vodochody lost a record 1.3 billion Kč last year. It is currently 10 billion Kč in debt.

Penta has said that its main interest in Aero concerned the company's ownership of the Vodochody airport 15 kilometers (9.3 miles) outside Prague. Penta co-owner Marek Dospiva said the company will pour billions of crowns into the site to build a new runway and terminal that will host low-budget airlines flying in and out of the capital.

Meanwhile, Penta representatives said they would be willing to sell land the government needs to build a third runway at Ruzyně, which is slated for privatization after the new runway is constructed. Transportation Minister Aleš Řebíček expects Penta to sell the land in the coming weeks, he told Mladá fronta Dnes Oct. 27.

Production will continue at Aero, but Penta is likely to stop producing its L-159 aircrafts, Dospiva told Hospodářské noviny Oct. 26.

Layoffs at Aero appear imminent, as Dospiva said the structure of the company's work force will have to change. Helicopter production for the U.S.-based Sikorsky company accounts for 87 percent of Aero's output, but only requires 300 of its 1,700 employees.

Aero workers service and repair thousands of the company's older L-39 and L-598 aircraft still in use around the world.

The sale ends more than 15 years of discussion about what the state should do with the ailing Aero.

The company arose from a joint-stock company founded in 1990. After restructuring several times, the Cabinet sold a stake in the company to Boeing Česká, a consortium of Boeing and Czech Airlines in the late 1990s. The government expected Boeing to help Aero expand.