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Trident vote is boost for BNFL
[March 19, 2007]

Trident vote is boost for BNFL


(The Express On Sunday Via Thomson Dialog NewsEdge) BNFL is to seek "significantly" more for its GBP100million stake in the A tomic Weapons Establishment (AWE) in the wake of last week's controversial decision by the Government to replace the Trident nuclear deterrent. Britain's Trident nuclear warheads are designed, manufactured and decommissioned at the AWE in A ldermaston, Berkshire. The vote in favour of a new GBP20billion Trident deterrent, despite a rebellion of backbench MPs, will extend the life of the AWE for many years, boosting its value. The weapons facility is run on behalf of the Ministry of Defence by a management company that is a consortium divided equally between BNFL, quoted support services firm Serco and America's Lockheed Martin. BNFL's 33 per cent stake was put up for sale late last year as part of the Government's drive to sell its energy assets. But the sale process, being run by NM Rothschild, had been put on hold pending the outcome of the MPs' vote on Trident. It is difficult to value the stake but the AWE contract makes a big contribution to BNFL's business, currently worth about GBP500million. The latest estimates available priced the stake at about GBP100million. Industry sources now expect BNFL, which is gradually being broken up, to hold an industry day in April where the Aldermaston contract will be showcased to potential bidders. Under the terms of the contract, if one owner sells, the other two have first refusal to buy. But Amec, the UK projectmanagement and engineering firm, is also interested in buying the stake. Other potential buyers are US firms Bechtel and Fluor, and design firm Jacobs, industry sources say. Only British or US firms are likely to be allowed to bid on security grounds. The work at Aldermaston was once considered so sensitive that the site was omitted from Ordnance Survey maps. The weapons establishment has been designing a new nuclear warhead at the facility in anticipation that the current Trident weapons system - ballistic missiles fitted with warheads and carried by the Vanguard submarines - would be replaced. The Trident decision is likely to boost the value of Devonport submarine yard near Plymouth, which has been put up for sale by owner DML. The GBP500million yard refits and refuels the UK's nuclear submarine fleet. BAE Systems, Britain's biggest defence company, is preparing to bid for Devonport with or without private equity firm Carlyle Group. It would then combine the base with its submarine-building facility at Barrow, Cumbria.



Copyright 2007 The Express on Sunday. Source: Financial Times Information Limited - Europe Intelligence Wire.

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