European defence firm EADS has valued BAE Systems’s 20% shareholding in Airbus to be worth at least €3.5 billion ($4.2 billion) but stresses that there are no immediate plans to acquire the stake from the UK manufacturer.
EADS has an obligation to purchase the shareholding should BAE opt to sell out of Airbus. Changes to international accounting standards mean that EADS is counting this option as a liability, and this has prompted EADS to disclose the value of the BAE stake.
The valuation marks the first time the airframer has been valued and places the entire company at a hypothetical €17.5 billion.
“As a result we are showing a liability for puttable instruments of €3.5 billion in our balance sheet,” said EADS chief financial officer Hans Peter Ring, speaking as the firm unveiled its full-year financial results yesterday.
Ring says that it is “not up to” EADS to make an approach to BAE but concedes that it would have to be prepared to pay a “significant amount” for the stake if required.
While EADS has previously expressed interest in the shareholding a spokeswoman for BAE says that the company is not presently prepared to sell its stake.
“With regards to any business BAE has, we’re always keeping an eye on [situations] to ensure shareholder value,” she says. “But there is no news on [any sale of the Airbus shareholding].”
EADS’ full-year financial results showed that Airbus earnings before interest and tax rose to €2.3 billion last year from €1.91 billion in 2004.
DAVID KAMINSKI-MORROW / LONDON
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Source: Flight International
