VT makes its final shipyard departure with £300m sale

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BAE Systems will take back full control of two Clyde shipyards after its joint venture partner, VT Group, took an option yesterday to sell its stake in the merged business for an estimated net gain of £300 million.

A spokesman for the joint venture, BVT Surface Fleet, confirmed the 4,000-plus shipbuilding jobs on the Clyde would be safe following the completion of the deal in July.

The move came after VT Group, formerly Vosper Thorneycroft, yesterday won approval from the Ministry of Defence to exercise an option to sell its 45 per cent stake in the joint venture as part of its plan to move out of manufacturing completely to focus on services.

The deal signals the end of VT's 150-year link with the shipbuilding industry.

Under the terms of the joint venture, VT was able to sell its stake for an estimated 380m after one year, or in three years' time BAE could ask to buy it. The company said the proceeds of the sale would be about 300m after costs.

VT and BAE, Britain's two largest shipbuilders, merged their shipbuilding operations last July, combining BAE's yards in Glasgow and VT's in Portsmouth. A spokesman for BVT confirmed the shipbuilder would continue as a wholly owned subsidiary of BAE Systems.

"The ships, the jobs, the investment – that all continues," said spokesman Charles Thompson.

"BVT was always going to move back to BAE. This is the early exercise of that option."

BVT will continue building the MoD's Type-45 destroyers. Yesterday hundreds of visitors welcomed the first of these to be built, HMS Daring, as it arrived at its home port in Portsmouth. Five more are currently being built.

The BVT yards in Govan and Scotstoun will also be involved in the building of two aircraft carriers, a 4bn project that is expected to create 10,000 jobs in Portsmouth, Barrow-in-Furness, Glasgow and Rosyth.

With an estimated 6bn worth of orders to fill, Thompson confirmed BVT had "its healthiest order book the industry has seen for many decades".

However, VT sees the viability of ship building as only a "medium-term" proposition.

The company said it has been shifting away from manufacturing towards services for the past 15 years. Its focus on military support and waste management contracts accounted for about 80 per cent of the company's 1.2bn turnover last year.

Phil Rood, spokesman for VT, said: "Shipbuilding is a notoriously lumpy business. One minute you are hiring people and you get a lot of work and the next you are in the opposite situation."

Rood said the group would use the proceeds of the sale to buy more services businesses. He said the "major factor" in selling up now was acquisition opportunities as prices are brought down by the recession.

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