26 Apr 07. Finmeccanica plans to propose a capital increase at next GM
Finmeccanica is to propose a capital increase at the next general meeting (GM) to be held on 29 and 30 May, “with the objective of assuring resources for growth and at the same time guaranteeing the group financial and capital structure strength”. According to a group announcement on 25 April, the capital increase may be carried out in different tranches, reserved to institutional investors, with the exclusion of pre-emptive rights, within the limits of 10 per cent of company capital. (Source: Jane’s Defence Industry)
30 Apr 07. BAE Systems is considering withdrawing from the auction for Plymouth’s Devonport dockyard after failing to reach agreement with either of the two other bidders over a joint offer for the strategically sensitive nuclear submarine maintenance facility. Britain’s biggest military manufacturer has been under pressure to find a partner to allay government concerns that its submarine programme would become unduly reliant on BAE, which owns the submarine-building shipyard at Barrow-in-Furness in Cumbria. Talks with Babcock International, the UK support services group that runs the Faslane submarine base on the Clyde, ended this week without agreement. An attempt to forge a partnership with the third bidder in the second round of the auction – Carlyle, the US private equity group – foundered last month after failing to agree a value for the Barrow shipyard. With a Thursday deadline for second-round bids, BAE is believed to be examining pulling out of the bidding. BAE said yesterday: “We continue to look at various options. We will make a decision in due course about how we intend to approach the bidding process.” The Ministry of Defence wants to consolidate the defence sector to drive down costs before the £20bn programme to replace the Trident nuclear deterrent, carried on four submarines. But parts of the MoD – reinforced by Treasury pressure – are reluctant to see the vertical integration that would be created if BAE combined ownership of Britain’s only submarine-building facility with sole control of Devonport, which refuels and refits the Royal Navy’s submarine fleet. Lord Drayson, defence equipment and support minister, has indicated he would welcome private equity involvement, and has a good relationship with Carlyle after its lead role in floating Qinetiq, the former MoD research arm. The auction was launched after KBR, the US infrastructure group, was told to sell its 51 per cent stake in Devonport, following a dispute with the MoD. Balfour Beattie and Weir Group own the rest of the equity and are also selling, with valuations of the company varying from £250m to £400m. (Source: FT.com)
02 May 07. Carlyle, the US private equity firm, has offered to take over the running of Britain’s multi-billion pound nuclear submarine-building programme, in a direct challenge to BAE Systems, the UK’s biggest arms maker. The buyout group has established strong ties with the Ministry of Defence after leading the privatisation of Qinetiq, the former defence research laboratories. However, its attempt to take a lead role in such a strategically important sector will be controversial. Carlyle’s move is part of its bid to acquire the Devonport naval dockyard in Plymouth, which refits and refuels the Royal Navy’s submarine fleet. Babcock International, the support services company that runs the Faslane submarine base on the Clyde, has also made an offer for Devonport. Bids for the yard are due today. The MoD wants the submarine industry to consolidate to drive down costs ahead of the £20bn replacement of the submarine-borne Trident nuclear deterrent. BAE, owner of Britain’s only submarine building facility in Barrow-in-Furness in Cumbria, explored joint bids with both Carlyle and Babcock for Devonport, but decided neither made commercial sense. The MoD and the Treasury wanted BAE to team up with another buyer to avoid concerns that it was becomin