Re Contract

RNS Number : 0613T

BAE SYSTEMS PLC

21 September 2010

 



BAE Systems - Trinidad and Tobago OPV contract

21 Sept 2010

BAE Systems announces that it has received written notice from the Government of Trinidad and Tobago (GORTT) that it wishes to cancel the programme under which BAE Systems is providing three Offshore Patrol Vessels and support to the Trinidad and Tobago Coast Guard.  The contract was entered into in April 2007 by the previous Trinidad and Tobago government and VT Shipbuilding International Limited; BAE Systems acquired full control of VT Shipbuilding International Limited in October 2009. 

Whilst the programme has suffered from delays, prior to the receipt of the notice from the GORTT 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 programme resulted in cash adjustment to the acquisition consideration and further provisions were charged to the acquisition accounts for that transaction.  Whilst the financial consequences of any termination cannot be definitively assessed at this time, the Group estimates a further charge of up to £150 million, before tax, may be required in the Group's accounts for 2010, before recognising 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. 

Issued by:

BAE Systems plc

London

 

END

 

 

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