|So the Carriers still looking pretty certain then? But will we have much to fly off them once their built??
ONDON (Thomson Financial) - VT Group Plc. and BAE Systems Plc. (other-otc: BAESF.PK - news - people ) will launch their long-awaited joint venture to combine their shipbuilding and naval support operations after the UK Ministry of Defence approved a project to build two aircraft carriers for the Royal Navy, the companies said Tuesday.
The two groups said they would finalise arrangements for the venture, which has been on hold while they awaited the MoD's go-ahead for the carriers.
There had been speculation that the 4 billion pound CVF carrier project, first announced last July, might fall victim to defence spending cuts.
BAE and VT said they expect to sign the JV transaction documentation shortly. The agreement will then be subject to VT shareholder approval.
BAE chief executive Mike Turner said: 'This is an important milestone in the development of the CVF programme and plays a major part in the long term sustainability of the UK naval sector and the transformation of our business.
'The programme will provide a strong order book and forward workload over the coming years and, most importantly will provide our armed forces with significantly enhanced capability.'
In a separate statement, the MoD said it had completed all the necessary financial, commercial, and management arrangements for the project, adding that the super aircraft carriers will be the biggest and most powerful surface warships ever constructed in the United Kingdom.
The new VT-BAE joint venture will be a key member of the Aircraft Carrier Alliance which will construct and assemble the new carriers at shipyards in Portsmouth, Barrow-in-Furness, Glasgow and Rosyth, said the MoD.
Other members of the alliance include Bab International Group Plc. and Thales (other-otc: THLEF.PK - news - people ) UK. Bab said the contract will be worth some 600 million pounds to Bab through the duration of the programme to 2015.
Thales said the contract will be worth well over 500 million euros to the group. 'We are delighted with the decision which has been taken today. We have been working on the programme since the very beginning and the design which has been processed so far is a Thales design,' said CEO Denis Ranque.
VT is also awaiting a government decision on a 6 billion pound military flight training contract and last week said it and Lockheed Martin (nyse: LMT - news - people ) were expecting to reach a financial close on the project before the end of May.