24.10.2003, 14:40
EADS announces signature of the £ 2.5 bn Skynet 5 contract with UK MoD
- Pioneering approach offering cutting edge defence technology with a customer-tailored financing scheme (PFI)
- EADS SPACE site at Stevenage, UK, becomes centre of excellence for military communications satellites and services
- Enhances EADS order book and growth momentum in Defence with UK MOD as a primary customer
London, 24 October 2003: EADS subsidiary Paradigm Secure Communications Limited has signed the £2.5bn Skynet 5 Private Finance Initiative (PFI) contract with the UK Ministry of Defence (MOD). Paradigm will contract with EADS Astrium Ltd for the design and manufacture of 2 satellites, complete launch services and corresponding ground segment, to enable it to provide secure military communications services over the next 15 years. This is the second largest defence contract awarded by the UK MOD to EADS in 2003 following the UK's order for 25 A400M military transport aircraft in May. With this new order intake EADS defence order book now exceeds E 45 bn, representing more than seven times the 2002 level of defence revenues. In terms of defence order book, EADS ranks as the n°1 in Europe and n°2 worldwide.
'This contract shows that, as well as being the European leader in satellite manufacturing through its EADS Astrium subsidiary, EADS is also a major systems integrator and Defence services provider, and this reinforces the group's strategy of enhancing focus on defence business growth. It also confirms EADS' access to the UK market and strengthens EADS' commitment to the UK as one of its home nations, with over 13,000 EADS direct employees working in the UK and E 3.1 bn purchased from UK suppliers. Stevenage in the UK is being established as the wordwide centre of competence for secure military communications satellites and services.' said Philippe Camus and Rainer Hertrich, CEOs of EADS.
The UK is one of the four main markets for EADS, with the US, Germany and France (E 2.5 bn revenues from UK in 2002 and an order book worth E 17 bn at the end of June 2003). After the 2002 EasyJet deal in commercial aviation and the A400M UK order, Skynet 5 is the third major contract that considerably expands the EADS business in the UK. EADS is presently partner of Air tanker one of the two contenders in the FSTA £13 bn bid offer for military tanker aircraft to the UK MOD - also a PFI programme.
'Through this Skynet 5 PFI contract, EADS has demonstrated a pioneering approach in combining its high technology space capabilities with customer-tailored financing. This demonstrates EADS' ability to design and implement financing schemes that better meet the customer's needs, whilst limiting our financial exposure.
This PFI structure is particularly well suited to financing service provision contracts for defence customers. While cash preservation remains the primary focus, EADS is implementing innovative financing solutions to secure profitable growth in this new market environment.' the CEOs continued.
This PFI scheme involves a debt financing with bank syndication. The syndication for this 12.5-year term bank debt of £963 million took place during the summer period and was very successful, with an oversubscription of more than 300 percent. Around 30 international banks are participating in the deal arranged by the financial institutions BNP Paribas, CIBC and HSBC.
François Auque, CEO of EADS SPACE, stated 'This contract is a clear indication of the UK MOD's confidence in EADS SPACE, which is becoming a leading supplier to the British Armed Forces.
More than 2,000 employees already work in EADS Astrium UK. By drawing upon the expertise of its UK personnel, EADS Astrium will design, develop and manufacture the Skynet 5 system comprising two satellites, as well as related ground equipment.'
François Auque added 'Under this contract, we are responsible for all UK MOD satellite communications requirements including the maintenance and operation of the complete ground infrastructure, comprising the control centres, and fixed, mobile and transportable terminals that provide seamless links into fixed and mobile ground networks. We look forward to launching a highly successful Skynet 5 programme and to delivering cost effective communications services to the UK MOD and to other military organisations around the world.'
Malcolm Peto, Managing Director, Paradigm Secure
Communications Limited, said 'Paradigm is delighted to have achieved contract signature and made such a successful start to the programme. We recently took over operation of the existing UK Skynet 4 satellites and ground segment and from today, are delivering services to a number of overseas customers, under MOU terms. Paradigm and its team members now look forward to developing this innovative concept into a reality and delivering secure, reliable, cost effective communications services.'
The Skynet 5 contract extends through to 2018 and the programme revenues could be worth more than £2.5bn over this period. The Skynet 5 contract is awarded to Paradigm Secure Communications Limited, a 100% owned subsidiary of EADS, which is responsible for meeting the UK MOD requirements; for seeking to capture overseas business; and for the relationship with its lead banks (BNP-Paribas, CIBC and HSBC). Paradigm Secure Communications Limited's two primary subcontractors are Paradigm Services (also an EADS wholly owned subsidiary) for end-to-end service delivery, including network maintenance, customer support and technical refresh, and EADS Astrium for the design and implementation of at least two new Skynet 5 satellites, upgrades to existing UK ground control stations, provision of a new fleet of land terminals and full upgrades for the SCOT, Shipborne Communications Terminals on board Royal Navy ships.
EADS is the second largest aerospace and defence company in the world, with revenues of E 29.9 billion in the year 2002 and a workforce of more than 100,000. As a systems integrator, it is one of the few companies worldwide capable of combining various products and technologies to form complete systems and offering the associated services. The EADS group includes the aircraft manufacturer Airbus, the world's largest helicopter supplier Eurocopter and the joint venture MBDA, the second largest missile producer in the global market. EADS is the major partner in the Eurofighter consortium, develops the A400M military transport aircraft, is the prime contractor for the Ariane launcher and for the French deterrent missile, is a leading civil and military satellite supplier and the largest industrial partner for the European satellite navigation system Galileo. EADS has over 70 sites in France, Germany, Great Britain and Spain and is active in many regions worldwide, amongst them America, Russia and Asia.
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- Pioneering approach offering cutting edge defence technology with a customer-tailored financing scheme (PFI)
- EADS SPACE site at Stevenage, UK, becomes centre of excellence for military communications satellites and services
- Enhances EADS order book and growth momentum in Defence with UK MOD as a primary customer
London, 24 October 2003: EADS subsidiary Paradigm Secure Communications Limited has signed the £2.5bn Skynet 5 Private Finance Initiative (PFI) contract with the UK Ministry of Defence (MOD). Paradigm will contract with EADS Astrium Ltd for the design and manufacture of 2 satellites, complete launch services and corresponding ground segment, to enable it to provide secure military communications services over the next 15 years. This is the second largest defence contract awarded by the UK MOD to EADS in 2003 following the UK's order for 25 A400M military transport aircraft in May. With this new order intake EADS defence order book now exceeds E 45 bn, representing more than seven times the 2002 level of defence revenues. In terms of defence order book, EADS ranks as the n°1 in Europe and n°2 worldwide.
'This contract shows that, as well as being the European leader in satellite manufacturing through its EADS Astrium subsidiary, EADS is also a major systems integrator and Defence services provider, and this reinforces the group's strategy of enhancing focus on defence business growth. It also confirms EADS' access to the UK market and strengthens EADS' commitment to the UK as one of its home nations, with over 13,000 EADS direct employees working in the UK and E 3.1 bn purchased from UK suppliers. Stevenage in the UK is being established as the wordwide centre of competence for secure military communications satellites and services.' said Philippe Camus and Rainer Hertrich, CEOs of EADS.
The UK is one of the four main markets for EADS, with the US, Germany and France (E 2.5 bn revenues from UK in 2002 and an order book worth E 17 bn at the end of June 2003). After the 2002 EasyJet deal in commercial aviation and the A400M UK order, Skynet 5 is the third major contract that considerably expands the EADS business in the UK. EADS is presently partner of Air tanker one of the two contenders in the FSTA £13 bn bid offer for military tanker aircraft to the UK MOD - also a PFI programme.
'Through this Skynet 5 PFI contract, EADS has demonstrated a pioneering approach in combining its high technology space capabilities with customer-tailored financing. This demonstrates EADS' ability to design and implement financing schemes that better meet the customer's needs, whilst limiting our financial exposure.
This PFI structure is particularly well suited to financing service provision contracts for defence customers. While cash preservation remains the primary focus, EADS is implementing innovative financing solutions to secure profitable growth in this new market environment.' the CEOs continued.
This PFI scheme involves a debt financing with bank syndication. The syndication for this 12.5-year term bank debt of £963 million took place during the summer period and was very successful, with an oversubscription of more than 300 percent. Around 30 international banks are participating in the deal arranged by the financial institutions BNP Paribas, CIBC and HSBC.
François Auque, CEO of EADS SPACE, stated 'This contract is a clear indication of the UK MOD's confidence in EADS SPACE, which is becoming a leading supplier to the British Armed Forces.
More than 2,000 employees already work in EADS Astrium UK. By drawing upon the expertise of its UK personnel, EADS Astrium will design, develop and manufacture the Skynet 5 system comprising two satellites, as well as related ground equipment.'
François Auque added 'Under this contract, we are responsible for all UK MOD satellite communications requirements including the maintenance and operation of the complete ground infrastructure, comprising the control centres, and fixed, mobile and transportable terminals that provide seamless links into fixed and mobile ground networks. We look forward to launching a highly successful Skynet 5 programme and to delivering cost effective communications services to the UK MOD and to other military organisations around the world.'
Malcolm Peto, Managing Director, Paradigm Secure
Communications Limited, said 'Paradigm is delighted to have achieved contract signature and made such a successful start to the programme. We recently took over operation of the existing UK Skynet 4 satellites and ground segment and from today, are delivering services to a number of overseas customers, under MOU terms. Paradigm and its team members now look forward to developing this innovative concept into a reality and delivering secure, reliable, cost effective communications services.'
The Skynet 5 contract extends through to 2018 and the programme revenues could be worth more than £2.5bn over this period. The Skynet 5 contract is awarded to Paradigm Secure Communications Limited, a 100% owned subsidiary of EADS, which is responsible for meeting the UK MOD requirements; for seeking to capture overseas business; and for the relationship with its lead banks (BNP-Paribas, CIBC and HSBC). Paradigm Secure Communications Limited's two primary subcontractors are Paradigm Services (also an EADS wholly owned subsidiary) for end-to-end service delivery, including network maintenance, customer support and technical refresh, and EADS Astrium for the design and implementation of at least two new Skynet 5 satellites, upgrades to existing UK ground control stations, provision of a new fleet of land terminals and full upgrades for the SCOT, Shipborne Communications Terminals on board Royal Navy ships.
EADS is the second largest aerospace and defence company in the world, with revenues of E 29.9 billion in the year 2002 and a workforce of more than 100,000. As a systems integrator, it is one of the few companies worldwide capable of combining various products and technologies to form complete systems and offering the associated services. The EADS group includes the aircraft manufacturer Airbus, the world's largest helicopter supplier Eurocopter and the joint venture MBDA, the second largest missile producer in the global market. EADS is the major partner in the Eurofighter consortium, develops the A400M military transport aircraft, is the prime contractor for the Ariane launcher and for the French deterrent missile, is a leading civil and military satellite supplier and the largest industrial partner for the European satellite navigation system Galileo. EADS has over 70 sites in France, Germany, Great Britain and Spain and is active in many regions worldwide, amongst them America, Russia and Asia.
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