Hawk Synthetic Training Facility The Deal

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Hawk Synthetic Training FacilityThe Deal

• David Marshall
• Associate Director
• KPMG Corporate Finance

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Hawk Synthetic Training Facility (HSTF)

• The first Synthetic Training facility delivered
  into service for the UK MOD under the PFI
• The first PFI contract awarded within BAE SYSTEMS
• Training for the Hawk TMk1 A aircraft at RAF
  Valley for a 13 to 18 year term
• 19 million funding requirement
• Design, Build, Finance and Operate (DBFO) contract

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Hawk - Procurement Timetable

• Industry Briefing - February 1997
• Return of bids April 1997
• Reflectone (BAE SYSTEMS) appointed preferred
  bidder November 1997
• Financial and contract close December 1997
• Phased opening of facility December 1998 to
  December 1999

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Financing the Hawk Facility

• 19 million funding requirement over 18 years
• Financed by BAE Systems with an intra-group
  corporate loan
• Simple funding approach helped conclude financial
  close quickly without the delays that can be
  experienced using external funding
• MOD did insist that a 10 portion of the debt
  finance should bear an equity type risk in the
  contract

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Hawk Facility Payment Mechanism

• Monthly charge for the CPT TMIS
• Hourly charge for the IFS and WTS simulators
• Guaranteed Take or Pay at 80 of Expected MOD
  usage
• Third party usage encouraged with Revenue sharing

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Hawk Synthetic Training FacilityThe
Contractors View

• Ralph Pidsley
• BAE SYSTEMS