MINISTRY OF DEFENCE
News Release (108/2008) issued by The Government News Network on 10
June 2008
The Public
Accounts Committee has today published a report into the
successful privatisation of QinetiQ.
Minister for Defence Equipment and Support Baroness Taylor said:
"I welcome the Committee's recognition that the
privatisation of QinetiQ succeeded in generating £800M of proceeds
for the taxpayer, and created a successful British-based
technology business providing a sustainable future for 13,000 staff.
"I do not accept the PAC's conclusion that a further
£90M could have been achieved from the sale. This is pure
speculation, and fails to take into account the realities of what
could be achieved in negotiation. The Ministry of Defence was
backed by a range of experienced specialist advisors during the
sale process, including a leading merchant bank. The charge of
commercial naivety makes a good soundbite but is not supported by
the facts.
"The rewards earned by senior management have already been
the subject of much press comment. But the key point is that the
Department and its partner Carlyle agreed a scheme in which the
gains made by senior managers were linked directly to achieving
growth in the value of the business."
Notes to Editors
1. Since 2001, QinetiQ has been transformed from MOD's
in-house research and development organisation into an
international defence and security company. A factsheet is
available online on the MoD website: http://www.mod.uk/DefenceInternet/FactSheets/ModAndQinetiq.htm
2. The privatisation process has generated more than £800m for
the taxpayer - £600m in cash plus a retained stake (approx 19%) in
the company currently worth around £200 - 250m.
3. The Government has always made it clear that ultimately it
anticipates selling its entire financial stake (approx. 19%) in
the company in order to realise its financial investment and to
achieve best value for money for the UK taxpayer.