Notice to Bond Holders

British Aerospace PLC
13 January 2000


                            NOTICE
                     to the holders of the
   £685,960,000 3.75 PER CENT. SENIOR UNSECURED EXCHANGEABLE
                       BONDS DUE 2006 of
           BRITISH AEROSPACE PUBLIC LIMITED COMPANY
                             of an
              ADJUSTMENT TO THE EXCHANGE PROPERTY
                               
British  Aerospace  Public  Limited  Company  ('BAE  SYSTEMS')
announced  on  15th December, 1999 that it  has  entered  into
arrangements  pursuant to which BAE SYSTEMS has an  option  to
sell  to  Mannesmann  Aktiengesellschaft  ('Mannesmann'),  and
Mannesmann has an option to purchase from BAE SYSTEMS, some or
all   of  BAE  SYSTEMS'  holding  of  shares  in  Orange   plc
('Orange').  On 29th December, 1999 BAE SYSTEMS exercised  its
option  to  sell to Mannesmann 20,888,823 Orange shares.   The
sale  of  such  Orange shares was completed  today.   Of  such
Orange  shares which were sold to Mannesmann, 14,372,036  were
comprised  in  the  Exchange  Property  in  respect   of   the
£685,960,000  3.75  per  cent. Senior  Unsecured  Exchangeable
Bonds due 2006 (the 'Exchangeable Bonds') immediately prior to
the  sale  ('exchange Orange shares') and 6,516,787  had  been
purchased  in the market by or on behalf of BAE SYSTEMS  since
15th  December,  1999 ('newly acquired Orange  shares').   The
consideration  for  the  sale  of  such  Orange   shares   was
equivalent  in value to the basic terms of Mannesmann's  offer
for  Orange of 0.0965 of a Mannesmann share and £6.40 in  cash
for each Orange share.

BAE  SYSTEMS determined on 15th December, 1999, in  accordance
with  the  provisions  of Condition 7(h) of  the  Exchangeable
Bonds,  that  an  adjustment should be made  to  the  Exchange
Rights  under the terms of the Exchangeable Bonds  to  reflect
any  sale  of  Orange  shares to Mannesmann  pursuant  to  the
arrangements  described  above. In accordance  with  Condition
7(h) of the Exchangeable Bonds, an independent investment bank
of  international repute selected by BAE SYSTEMS and  approved
in  writing by The Law Debenture Trust Corporation p.l.c.,  as
trustee  for  the  holders  of  the  Exchangeable  Bonds,  has
determined  in  good  faith, acting as  an  expert,  that  the
adjustment  referred to below to the Exchange Rights  is  fair
and reasonable.

Following  the  sale  by BAE SYSTEMS of those  of  its  Orange
shares  referred to in the first paragraph above, the Exchange
Property has been adjusted so that it shall comprise:

(i)  a   total  of  2,015,771  Mannesmann  shares,  of   which
     1,386,901 arise from such sale of exchange Orange  shares
     and 628,870 arise from such sale of newly acquired Orange
     shares,  the latter having replaced the total  amount  of
     £91,981,030  of cash received from such sale of  exchange
     Orange  shares  at  a price of £146.2640  per  Mannesmann
     share   (being  the  average  notional  price  of   those
     Mannesmann shares by reference to the purchase  price  of
     the newly acquired Orange shares); and

 (ii)      45,589,512 Orange shares, being the balance of  the
     Orange  shares  comprised in the Exchange Property  which
     have not been sold to Mannesmann.

There will be further adjustments to the Exchange Property  in
the  event  that BAE SYSTEMS sells further exchange  or  newly
acquired   Orange  shares  to  Mannesmann  pursuant   to   the
arrangements described above.

30th  December,  1999            Issued by  British  Aerospace
                                 Public Limited Company