Shipbuilders unite to form new company

7:36am Thursday 12th June 2008

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THE long-awaited agreement to unite Hampshire and the UK's two remaining naval shipbuilders has finally been signed.

VT yesterday inked a legally-binding agreement with BAE Systems to combine their shipbuilding interests into one company, named BVT Surface Fleet Limited (BVT).

VT, which still employs hundreds of Southamp-ton workers from the days when it was based in Woolston, will have 45 per cent of the new company, while BAE will have the remaining 55 per cent.

The deal was contingent on a £4 billion Government order for two new aircraft carriers, which was confirmed last month and is expected to be signed shortly.

Work on the ships, to be called The Queen Elizabeth and The Prince of Wales, will sustain 10,000 UK jobs at its peak, including 1,200 at VT's Portsmouth shipworks, which will build the forward mid-ship sections of the vast ships.

The 280-metre, 65,000-tonne carriers will be able to carry 40 aircraft and are due to go into service in 2014 and 2016.

Yesterday's agreement also sees VT acquire from BAE the remaining 50 per cent of their joint Flagship Training business that it does not already own, for £65m. A further £10m will be paid, depending on the performance of the business.

The deal leaves VT free to concentrate on its lucrative support services work, which has been making an increasingly key contribution to turnover. Last year shipbuilding generated £243m - just 20 per cent of its £1.2 billion sales.