Almost £1 billion sterling has been wiped off the share value of British defence and aerospace group BAE Systems after the company warned of problems with two of its biggest programmes.
Shares fell 25 per cent to 98 pence in London early this morning, leaving the company with a market cap of £3.03 billion, down from more than £4 billion at the close yesterday.
Investors reacted after Europe's largest defence group issued a statement late yesterday warning that "additional issues have arisen" in relation to its Astute attack submarine and the Nimrod maritime patrol aircraft programmes.
The company warned there were "substantial schedule and cost implications" but gave no further details of the difficulties.
BAE said it was in talks with the British ministry of defence (MoD) in an effort to modify the contracts.
A spokesman for the ministry said: "We have made it clear to the company that the MoD cannot protect it from cost overruns which have arisen from its failure to perform.
Analysts have criticised BAE Systems for providing too little information too late.
AFP
