BAE to buy Surface Fleet stake

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BAE Systems has announced it will purchase VT Group’s 45 per cent stake in BVT Surface Fleet through a deal worth £346m.

Part of the agreement includes a payment by VT Group of £43m into BVT, a naval shipbuilding and support company owned by BAE and VT, to settle outstanding issues.

BAE also announced VT will pay BAE £70m in deferred payment for a 2008 deal that saw BAE sell 50 per cent of its stake in Flagship Training.

The deal is subject to regulatory approval and the support of VT Group shareholders, which will be meeting in October 2009.

The disposal of its shareholding in BVT will result in VT becoming a pure support services business.

Paul Lester, chief executive of VT, said: ‘This completes the final step of our exit from our shipbuilding and related activities. It will leave us in a strong financial position with net cash on our balance sheet and positions us to continue to pursue a growth strategy focusing exclusively on support services.’

BVT is the UK’s leading provider of surface warships and service support and runs operations in Glasgow, Portsmouth and Filton near Bristol. VT employs more than 7,000 people.

BVT generated revenues of £439.5m and a loss before tax of £19.7m for the nine months ending 31 March 2009.