What an interesting time for MoD to selling Qinetiq shares !!
Qinetiq stake sale raises £257m
By Sylvia Pfeifer and John Willman
Published: September 9 2008 08:59 | Last updated: September 9 2008 08:59
The government raised £257.3m from the placing of its remaining stake in Qinetiq, the defence technology group that was privatised in 2003 and floated in 2006.
The Ministry of Defence placed its holding of 124.9m shares, representing 18.9 per cent of the company’s ordinary capital, at 206p –=2 06p above the original float price and 1p above the level at which Carlyle Group sold out at in February 2007.
The shares fell nearly 8 per cent on the news in early trade to 206.6p before closing down 6.04 per cent, or 13½p, at20210p.
Tuesday’s sale was not unexpected and came just days after its shares reached a record high of 235¼p last week. The sale is good news for the cash-strapped MoD.
The department said it would retain a substantial proportion of the proceeds, with the rest being diverted to the exchequer for “government spending priorities”.
It said: “The government always made it clear that it anticipated selling its entire financial stake in order to realise its financial investment and to achieve best value for money for the UK taxpayer.”
The contentious privatisation of Qinetiq in 2003 was criticised by MPs for giving bad value for money to the taxpayer. However, the government has been trying to sell state-owned assets such as the Tote and its stake in British Energy as the fiscal deficit has swollen. In December, the Liberal Democrats warned against premature sales to fill the deficit in the public finances at a time of stock market turn..
With an announcement expected towards the end of the month what message is this sending out if any !!!
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