APPENDIX 7
Letter from Parliamentary Under Secretary
to the Chairman (4 March 2003) (D)
Shortly before Christmas, I announced to Parliament
that we had signed a deal to sell a minority stake in QinetiQ
to The Carlyle Group. I also wrote in similar terms to parliamentary
colleagues with QinetiQ sites in their constituencies and to those
who had previously expressed an interest in the DERA PPP process.
As I made clear, final completion of the transaction was subject
to the satisfactory fulfilment of a number of conditions. This
has now been achieved and I am pleased to inform you that the
sale has been formally executed in accordance with the terms of
my previous announcement.
At the point of signing we made public our estimate
that The Carlyle Group would pay us between £140-150 million.
I am pleased to confirm that the final amount will be at the top
end of this range, and we will receive just over £149 million.
This is in addition to £50 million already received directly
from QinetiQ as part payment for the company's assets. Overall
we will have received nearly £200 million from the PPP process
so far and we continue to own around 62% of QinetiQ's shares.
I believe that this is a good result for the
taxpayer, QinetiQ, its staff and its MoD customers. We now look
forward to period of strategic partnership with The Carlyle Group
culminating in the sale of our remaining stake in the company.
Whilst the precise timing and choice of transaction route will
depend on value for money considerations, I anticipate that the
sale will occur through a flotation of QinetiQ in around three
to five years.
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