QinetiQ raises 618 million pounds in IPO, shares rise 8% |
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Published
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Fri, 10 Feb 2006 16:15
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LONDON: Britain's government-owned defence research company QinetiQ Group Plc. raised 618 million pounds as its shares got listed on the London Stock Exchange at an offer price of 200 pence-a-share. This is the first IPO by a government-owned company since prime minister Tony Blair came to power in 1997.
The company, formed after the dissolution of the erstwhile Defence Evaluation and Research Agency, develops technology for use in explosives, unmanned airplanes and submarines and sells it to the U.K. and U.S. militaries. The government had divested one-third of its holding in 2002 to Washington-based Carlyle Corporation.
Upon listing, the shares of the company rose as much as 16 pence, or 8 per cent, valuing the company around 1.3 billion pounds.
The government will raise 297 million pounds from the offer while Carlyle will get 161 million pounds, as they reduce their holding. Carlyle had paid 42 million pounds in cash for the stake.
The IPO was conditional -- allowed only to institutional investors and QinetiQ employees. Trading for all investors starts Wednesday. The global offer comprised 75 million new ordinary shares and 233.8 million existing ordinary shares, representing 47.6 per cent of the 648 million ordinary shares in issue following the completion of the offer.
QinetiQ's chairman John Chisholm has a stake worth 26 million pounds, while chief executive officer Graham Love 21 million pounds in the company. Both have signed agreements not sell their stakes at the IPO.
Post-IPO, the government will own 24 per cent, Carlyle 13 per cent of the company, while its employees will have together own 2 per cent constituting 7 million shares.
Defence procurement minister Paul Drayson said the government has ensured that it remains in control through a majority shareholding and restrictions on foreign ownership. He said the government had received 230 million pounds through its divestment of stake to Carlyle, which comprise both cash and debt components.
Both the government and Carlyle have an option to sell 46 million more shares to stabilise trading in the shares.
QinetiQ had its latest half-year operating profit rise 40 per cent to 37 million pounds, with revenue up 28 per cent to 473 million pounds.
The company had said it intends to use part of the proceeds from the offer to make a payment of about 45 million pounds to reduce its defined benefit pension fund deficit and the balance to reduce amounts drawn under its revolving bank facility.
Investment banks Credit Suisse, JPMorgan Cazenove and Merrill Lynch had acted as joint co-coordinators, bookrunners and sponsors of the IPO.
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Government is privatising defence firm QinetiQ 