BAE may use Airbus cash for pensions
EUROPE - UK aerospace group BAE Systems may use some of the approximately £1.2bn (€1.7bn) proceeds from the sale of its 20% stake in airbus for pensions.
BAE said today it would sell the stake given the "challenging" outlook for the plane maker. It would return up to £500m to shareholders and then "consult with the trustees of the company's pension schemes and the Pensions Regulator with regard to any further investment in those schemes".
Anything left would be available for debt repayments and future investments and acquisitions.
In June, a combination of increased contributions, benefit reductions and cash payments was agreed to by BAE Systems and the unions to address the deficit of the £12.6bn hybrid scheme pension fund.
"As the sale of Airbus may affect the structure of our pension scheme - when the size of the company decreases that can also affect the deficit - we said at the time that in case of the sale of the Airbus stake we will engage with trustees to resolve that as well", a BAE spokeswoman told IPE.
She said that it was too early to say what amount might be paid into the scheme or what agreement the company and the pension fund trustees will come to.