19th Feb 2014 08:16
LONDON (Alliance News) - BAE Systems said Wednesday that the governments of the UK and Saudi Arabia have now reached a deal on higher prices for the Typhoon jets that Saudi Arabia ordered back in 2005.
The British defence and security giant did not provide any details of the agreement, but said it is in line with what it has expected when it gave a trading outlook for 2013.
It expects cash settlement for the higher price to start being paid in early 2014.
BAE said the price escalation agreement covers to its contract for the provision of Typhoon aircraft under the Salam programme, and these have been reflected in contractual arrangements between the Government of the UK and BAE Systems.
The Understanding Document signed by the Governments of the UK and the Kingdom of Saudi Arabia in 2005 included provision for the Typhoon aircraft acquisition by the Kingdom of Saudi Arabia to be at 2005 economic conditions, said the firm.
Ahead of the agreed revised terms in December, BAE reaffirmed its guidance that its 2013 earnings will be reduced by about 6 to 7 pence per share.
BAE Chief Executive Ian King, said, "This is an equitable outcome for all parties, I am pleased that we have been able to conclude this negotiation which builds on our long standing relationship with this much valued customer."
The defence firm soared to lead the FTSE 100 as the market opened, up 3.47% at 452.8 pence per share Wednesday.
By Alice Attwood; [email protected]; @AliceAtAlliance
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