Update: VT exits shipbuilding business

24th Sep 2009 07:14

Defence firm BAE Systems is to take full control of BVT Surface Fleet Limited, its joint venture with support services company VT Group.VT has exercised its option to sell its 45% holding in the company to BAE Systems for around £346m in cash.Coincident with the sale, VT Group will pump £43m of capital into BVT to settle various obligations, including claims in respect of certain export contracts which were contributed by VT Group into the BVT business. Additionally VT Group will pay a further £4.7m to BVT in respect of certain inter-company balances. BAE Systems will receive from VT Group in cash at completion of the transaction around £70m, comprising £65m plus accrued interest, in deferred payment for the sale on 1 July 2008 to VT Group of BAE Systems' 50% shareholding in Flagship Training Limited.BVT Surface Fleet was established in early 2008 to bring together the surface warship building and through-life support operations of BAE Systems and VT Group, including their joint venture, Fleet Support Limited.VT said exiting from BVT will result in VT becoming a pure support services business which, in the opinion of the directors, should make it a less volatile business with better growth prospects.The proceeds from the deal will provide VT with ‘greater financial flexibility to take advantage of opportunities, both organic and acquisitive.’