Babcock Distances Itself From Deputy Chairman's Comments

Babcock International Group PLC (BAB.LN) Monday dissociated itself from comments made by its deputy chairman Lord Hesketh that the program to build two new aircraft carriers for the Royal Navy was a "disaster" that would make Britain a "laughing stock."

Babcock's Rosyth yard is building the carriers. BAE Systems PLC (BA.LN) is the prime contractor on the program

Hesketh criticized BAE Systems in The Daily Telegraph on Monday for having a vested interest that had caused extra expense. The carriers will have to be fitted with catapults to launch the F35 fighter jets that will fly from their decks. The F35 is being built by BAE Systems and Lockheed Martin Corp. (LMT) and won't be ready until 2020, meaning the new U.K. carriers won't have British fighter jets on board for several years. Hesketh said the RAF's current fleet of Typhoon aircraft should have been adapted for sea, which would have been quicker and cheaper, but less lucrative for BAE Systems.

"Babcock dissociates itself from these personal comments, which do not in any respect reflect the views of the company," the British support services company said. "Babcock with its partners in the Carrier Alliance is focused on delivering this major upgrade to the U.K.'s defense capability on time and to budget."

BAE Systems wasn't immediately available for comment, but the Telegraph quoted a spokesman saying that the company was "absolutely committed" to the project. "We do not recognize the view given by Lord Hesketh," he was quoted as saying.

At 0901 GMT, Babcock's shares were down 5 pence, or 1%, at 571 pence, while BAE Systems was up 3 pence, or 1%, at 345 pence.

-By Steve McGrath, Dow Jones Newswires; 44-20-7842-9284; steve.mcgrath@dowjones.com

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