QinetiQ - Fair of Foul

Discussion in 'Current Affairs, News and Analysis' started by Oneshot, Feb 10, 2006.

  1. Yes, of course it is

  2. No - Fair Play - well done

  3. Please sir - thats not fair!!


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  1. Listening to the Radio this morning and also the previous coverage, all this shouting about the privatising OF QinetiQ seems to be daft. It smells of "Please sir, they took a gamble and made a lot of money, we didn't get enough so its not fair!"

    I'm not an employee (much the opposite) but as i understood at the time, it was one of those ventures that was a risk, and there were a number of ways that it could have went, and the investment that was made was seen as very risky at the time, but it has come up trumps.

    Now, why is such a massive fuss being made, the government offloaded the risk to a private company, and as a result, they made a good deal of money - (as did the government, and the taxpayer), so I say Fair game.

  2. Risk? Very few companies come a cropper when dealing with the Government - and especially the MOD. It's a job for life or until the company is taken over. Carlyle knew just what it was buying - a huge jewel! The land assets that were handed over to Qinetiq were worth hundreds of millions and you can bet your bottom dollar that Carlyle had identified that their money was backed up by the assets.

    This was the same type of deal as was the sale of the married quarters to Guy Hands (now one of the largest property owners in Europe) by the last bunch of political toerags. Both Governments have flogged off huge Defence assets for far less money than the assets were actually worth - and the MOD has suffered in both cases. Government has a time horizon of less than 5 years - the banks, industry amd private equity firms know that they start making real money at the 5 year point!

    As a taxpayer, I am appalled that something built and nurtured by the Ministry in its various forms over the last 50 years has been sold cheaply to a private investor. The Government could have given Qinetiq the money (£350M if I remember correctly) and allowed them to develop themselves to a level where they could have been easily privatised - and all the profit would have accrued to the taxpayer.

    /rant off

  3. I'd have to agree with you Oneshot. It's the government that are at fault not Carlyle Group, huzzah to them I say. No one is more surprised by the figures than people at QinetiQ themselves. One thing to remember is that most employees still think of themselves as Civil Servants from DERA days and sadly for them they still get the same salaries, hopefully this will change with the flotation. They have some of the best minds in the country and a lot of world leaders in various fields. the government should have really believed that when they gave it away instead of thinking short term cost-cuts.

    That said it's just another in a long line of MoD sell offs that have made many other people rich..land..housing...catering etc etc
  4. I wasn't copying litotes honest, we posted at the same time guv.
  5. in_the_cheapseats

    in_the_cheapseats LE Moderator

    The difficulty comes when you realise that when it comes to technology sharing, we had in the past a v good relationship with the US and there was a good amount of interaction between nations, mainly on the basis that DERA and the brainpower that it had, was a government run organisation. DSTL is a shadow of DERA.

    Since QQ was formed, let's just say that the US has been a little less forthcoming and is not keen to hand over new RD work to what is, a profit making organisation with its own agenda, certainly not interested in pure research unless there is money to be made for it.

    My feel for it is, more often or not, that the cutting thrust of RD work (the expensive bit) will be done elsewhere and subsequent work rather than ground breaking, will be QQs role.

    No dramas in the profit making bit (I'll be buying shares...) but in the long run , QQs formation and sell off has been a shortsighted move for military research and ultimately UK PLC.
  6. One good thing to come out of it is that a number of (not all) employees were offered the chance to buy £1000 worth of high risk shares during the original sell off. If the flotation goes ahead at touted price £1.33bn then everyone that elected to buy will see an instant profit of £100k+. The car park will give good combat indications of who bothered and the local samaritans will let you know about those that didn't.
  7. in_the_cheapseats

    in_the_cheapseats LE Moderator

    It was senior managers and execs only.

    How much were the "high risk" shares???

    Instant profit of 100k means that they would have been priced for the execs at 2p each. This I doubt. They were sold today at 205p .
  8. I have no idea what the price was. My information could be slightly iffy. However, the info I have is from someone who DIDN'T take up the offer. I'm only quoting him.

    Oh, and looking in the car park!
  9. Just to add (and i do apologise or being a bit pished). The Carlyle group members only put £150k cash (of personal money) on the original deal, if the return on that investment is now £123 million then i suppose that might give a clue as to the rate originally offered.

    Edited to add. Now I am sober, If i am correct the £1000 investment was not based on an amount of shares, it was purely a "risk your money" option during the initial buyout, investors were warned that they could easily lose the lot hence the high risk element. All in all a good gamble methinks.