BAE Systems today announced that it has established BAE Systems Capital Limited, a wholly owned subsidiary that will provide innovative financing options to support the Group's core businesses.
"BAE Systems Capital will allow us to build on the capabilities we have developed in the structuring of innovative financial solutions for our business, our partners and customers" said George Rose, BAE Systems Group Finance Director.
In June of 2001 BAE Systems completed Systems 2001 Asset Trust a US$2.1 billion structured bond issue backed by lease receivables from a fleet of regional aircraft. That transaction attracted record investor interest and was widely reported as setting a new benchmark in the structured finance market. At that time BAE Systems signalled its intention to bring similar transactions to the market in future as it develops a growing asset finance business.
BAE Systems Capital will concentrate on the increasing opportunities offered in the defence sector by the move towards the procurement of services under privately financed long term supply contracts. In the United Kingdom alone it is estimated that up to £4 billion of defence equipment and logistics spending a year could be transferred to industry contractors in this way.
John Weston, CEO of BAE Systems stated "BAE Systems is very well positioned to offer to customers a new range of solutions to their long term logistics needs. The creation of BAE Systems Capital will enable us to provide those solutions packaged together with a financing that will create a winning combination."
BAE Systems Capital will focus on the structuring of finance for products and services in the systems, defence and aerospace sectors. Commenting on the future direction of the business, Terence Black, the newly appointed Managing Director of BAE Systems Capital said, "Systems 2001 Asset Trust was the first of what we intend will be a series of asset backed portfolios, bringing to the market high quality cash flows enhanced by the servicing capabilities of BAE Systems as a global leader in its industry."
BAE Systems Capital is intended to maximise the return from the Group's investment in the growing global market for private finance projects and to ensure effective co-ordination of financial engineering activities throughout the Group. BAE Systems Capital is expected to operate as a business and to contribute to the Group's profits. BAE Systems Capital will be located in London and Farnborough.
BAE Systems employs some 100,000 people and has annual sales of around £12 billion. The company offers a global capability in air, sea, land and space with a world-class prime contracting ability supported by a range of key skills.
BAE Systems designs and manufactures military aircraft, surface ships, submarines, space systems, radar, avionics, communications, electronics, guided weapon systems and a range of other defence products.