Disposal

RNS Number : 3675H

BAE SYSTEMS PLC

26 May 2011

 



RNS statement

BAE Systems agrees disposal of Regional Aircraft Asset Management Business

26 May 2011

BAE Systems has agreed the sale to investment affiliates of Fortress Investment Group LLC of its Regional Aircraft Asset Management business and companies owning 151 regional aircraft (together the "Business") for cash consideration of $187 million.  The amount of the consideration is subject to an adjustment to reflect the difference between the estimated and actual trading and aircraft sales from 1 January 2011 up to completion.  Up to $21 million of the consideration will be deferred pending transfer of title of certain aircraft.

Certain of the aircraft-owning companies are funded through the Systems 2001 Asset Trust financing, a private placement of debt securities completed in 2001.  In connection with the disposal of the Business, BAE Systems has also entered into an agreement with the relevant parties to the private placement, which provides for the acquisition and redemption of $514 million of the Series G Equipment Notes and Series B Equipment Notes issued under the Systems 2001 Asset Trust financing. 

Based at Hatfield and Farnborough in the UK and Herndon, VA, the Business sells and leases regional aircraft to commercial aircraft operators and employs approximately 70 people.  The Regional Aircraft Support and Engineering business based at Prestwick and Weybridge in the UK is not included in the transaction and will continue to provide support and engineering services to the Business and to other commercial aircraft operators.

The sale of the Business will result in a small increase in the interest charge with the redemption of the structured finance but will not result in any material charge to profit and loss account.  The net impact of the changes to financing and proceeds of the sale is expected to reduce the group's net debt by approximately $180 million.

Completion of the sale of the Business is conditional upon, among other things, receiving regulatory approval and is expected to take place during the third quarter of 2011.

Issued by:

BAE Systems plc

London

 

END

 

 

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