News
Aircraft carriers announcements regarding negotiations with BAE in
New aircraft carriers
relation to the performance of certain export contracts.
VT has also agreed to inject £43 million of capital into
nose ahead
BVT on completion of the transaction. In aggregate,
therefore, the cash proceeds to be received by VT on the
Good progress is being made by Babcock in the disposal of its shareholding in BVT will be £303 million.
manufacture of one of the key elements of the new In addition, VT will, at completion, settle £4.7 million of
Queen Elizabeth class (QE) aircraft carriers. The ordinary course inter company balances with BVT.
bulbous bow is 27m long, has a maximum height of On the disposal of its shareholding in BVT and
9.5m and weighs some 315tonnes. pursuant to the terms of the agreement signed by VT
In a visit to Babcock’s Appledore shipyard in Devon and BAE in June 2008, in relation to VT’s acquisition of
at the end of last year, the UK Ministry of Defence’s BAE’s 50% shareholding in Flagship Training Limited,
Director Ships, Rear Admiral Bob Love, witnessed the VT will separately pay £70.2 million (comprising £65
progress being made on the module, forming part of million of deferred consideration and £5.2 million of
the first lower block (LB01). notional interest, held currently as debt) to BAE in
The bulbous bow was due to be completed and respect of deferred consideration and accrued interest.
shipped with the other LB01 components in the BAE has agreed to waive its right to be paid and VT has
spring of this year to Babcock’s Rosyth facility, where agreed to waive its right to be repaid £10 million under
the carrier sections will be combined and assembled the Flagship Acquisition Agreement, which payment or
in No1 Dock. repayment was dependant on the future performance of
the Flagship business.
The disposal of its shareholding in BVT will result in
VT becoming a pure support services business and the
Board of Directors of VT believe that this new focus will
provide for a more stable business with greater long-term
visibility and better prospects for growth. Furthermore,
the proceeds from the transaction will provide greater
financial flexibility to take advantage of opportunities,
both organic and acquisitive, to grow VT’s support
services offering to existing customers and add new
capabilities.
submarines
The bulbous bow section for the first QE class carrier.
Six Kilos for Vietnam
Russia is providing assistance for a major expansion of the
Company news Vietnamese Navy, including the sale of six submarines.
VT Group sheds
Relations between Hanoi and Moscow have been close
for 45 years, with Vietnam regarding Russia as a counter-
shareholding
balance to its traditional enemy of China. The aim of the
expansion of the Vietnamese Navy is to bolster claims
VT Group plc in the UK has confirmed that it has signed against China over potentially resource-rich islands in
a legally binding agreement with BAE Systems plc on the the South China Sea.
disposal of its 45% shareholding in BVT Surface Fleet As Naval Spyglass reported, Hanoi’s concern has grown
Limited, the shipbuilding and naval support joint venture as tensions mount with China over the Paracel and
between BAE and VT, for a cash consideration of £346 Spratly archipelagos, and Lieutenant General Nguyen
million (US$559.2 million). Chi Vinh, Vietnam’s deputy minister of defence, has
In accordance with the joint venture agreement called the rising tensions ‘a matter of concern’.
signed by VT and BAE in June 2008 in relation to BVT, Although both countries have agreed joint patrols in
this cash consideration corresponds to the minimum adjoining waters, Hanoi has been only too aware of its
exercise price of VT’s Put Option of £380 million, plus naval weakness. In 1988 Vietnam and China fought a
approximately £0.6 million of notional interest and net of brief naval battle near one of the Spratly reefs and more
deductions of £12.2 million in respect of pensions liabili- than 50 Vietnamese sailors died. Two years ago a Chinese
ties, £22 million in respect of dividend repayments and naval vessel fired at a Vietnamese fishing boat near the
£0.2 million in respect of notional interest on funding Spratlys, killing one sailor.
provided by BAE Systems to BVT. Further to previous The Vietnamese navy has five Petya (Project 159)
6
Warship Technology March 2010
WT_Mar-2010_p6-7-8-10-11-12-13.indd 6 23/02/2010 15:51:24
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