BAE Systems Gets Notice Of Cancellation For Trinidad, Tobago OPV Job
September 21 2010 - 11:18AM
Dow Jones News
BAE Systems PLC (BA.LN), said Tuesday that it has received
written notice from the Government of Trinidad and Tobago or GORTT
that it wishes to cancel the program under which BAE Systems is
providing three Offshore Patrol Vessels and support to the Trinidad
and Tobago Coast Guard.
MAIN FACTS:
-The financial consequences of any termination cannot be
definitively assessed at this time, the Group estimates a further
charge of up to GBP150 million, before tax, may be required in the
Group's accounts for 2010, before recognizing value from the
potential re-sale of the vessels.
-The company will seek to engage in commercial discussions with
GORTT to find an equitable settlement.
-The contract was entered into in April 2007 by the previous
Trinidad and Tobago government and VT Shipbuilding International
Ltd; BAE Systems acquired full control of VT Shipbuilding
International Ltd in October 2009.
-The program has suffered from delays, prior to the receipt of
the notice, the parties had been engaged in the final stages of
acceptance of the first ship.
-The second ship has completed its sea trials and will be ready
for delivery in October.
-The third ship is due to begin sea trials in November.
-Cost overruns on the program resulted in cash adjustment to the
acquisition consideration and further provisions were charged to
the acquisition accounts for that transaction.
-Shares at 1445 GMT up 2.4 pence, or 0.72%, at GBP336 pence,
valuing the company at GBP11.45 billion.
-By Razak Musah Baba, Dow Jones Newswires; 44-20-7842-9275;
razak.baba@dowjones.com
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