Shareholders in defence group BAE Systems have overwhelmingly backed the company's proposal to sell its 20 per cent stake in troubled planemaker Airbus to parent firm EADS.
BAE chairman Dick Olver yesterday told an extraordinary shareholders meeting called in London that 99.85 per cent of proxy votes representing more than 70 per cent of its shareholders had voted in favour.
The sale of the stake, worth 2.75 billion euros (£1.85 billion) is expected to be finalised in around nine working days.
Initially deemed lower than expected by BAE and investors, the stake's valuation set by investment bank Rothschild in July is seen positively by some who argue BAE has picked a clever time to leave the planemaker.
Franco-German firm EADS will own 100 per cent of Airbus after the disposal.
On Tuesday, EADS revealed that a fresh delay in the A380 - a major source of work for aerospace component manufacturers in the West Midlands - would push back the plane's first delivery by an additional ten months to the fourth quarter of 2007, stripping out expected free cash flow through 2010 by over six billion euros (£4.05 billion), meaning no operating profit on the plane for four years.
Brokerages responded by chopping their EADS share price targets and ratings agency Standard & Poor's said it might lower the firm's 'A' long-term corporate credit ratings.
Airbus said it would launch a cost-cutting plan called "Power8" aimed at saving two billion euros (£1.35 billion) a year by 2010.
BAE announced its intentions in April to offload its holding to EADS, a right it holds under a pact signed by Airbus's two owners.
When they could not agree on a price, Rothschilds was brought in and BAE initially balked at its assessment.
BAE requested an audit which was delivered by accountants PricewaterhouseCoopers last month which seemed to set BAE's mind at rest.
"Airbus is facing a challenging short to medium-term outlook," BAE concluded. "Airbus is likely to require significant investment to maintain its position in the market."
Airbus's resources are being squeezed by delays caused by complex wiring required for the A380 superjumbo.
Development of the plane has cost 12 billion euros (£8.1 billion) and Airbus has secured 159 orders, about half of what some analysts say would be the minimum number needed for the programme to break even.
Hit by a second and now a third confirmed delay, the A380 has not won a single firm new order in 2006.
The latest setback means customers will increase demands for compensation while some might decide on outright cancellations of their orders for the $300 million (£159.5 million) planes.
Compensation stems from the costs facing airlines having lease other planes until A380s are ready.
BAE is Europe's largest defence firm and a major player in armoured vehicles, nuclear submarines and other warships.
Europe's biggest player in the massive US defence market, BAE's footprint in Europe includes roles in major consortia building the Eurofighter combat jet.
Its Airbus stake sale will dilute BAE's earnings but the firm is expected to use some of the proceeds on new acquisitions.
Airbus contributed £254 million in profits before taxation on sales of £3 billion for BAE in 2005.
The world's airlines were forced to review growth plans yesterday after Airbus revealed more delays to its troubled A380 superjumbo.
Here are some key facts on how the mammoth double-decker aircraft measures up:
* Airbus has sold 143 passenger versions of the plane to 14 airlines.
* The A380 has a list price of $300 million (£159.5 million), compared with about $210 million (£111.7 million) for the smaller Boeing 747-400 jumbo. Both companies usually give discounts.
* Australia's Qantas Airways said it would not receive its first A380 until August 2008, two years late. It expects to receive four of the planes by the end of that year and seven by mid-2009. Qantas did not rule out cancelling the order.
* Virgin Atlantic Airways and Dubai airline Emirates are the biggest buyers with an order for 43 superjumbos worth $13 billion (£6.91 billion).
* Singapore Airlines confirmed it would receive compensation from Airbus for late delivery of its first A380 which is scheduled to make the inaugural flight from London. The airline will now receive its first plane in October 2007 instead of December this year, which had already been pushed back six months from the originally proposed date.
* Airbus says it needs to sell 250 to 300 of the planes to recover its costs. The programme has cost 12 billion euros (£8.1 billion) to develop, with suppliers' and European government loans helping to offset the cost.
* An all-economy class A380 could seat 853 passengers versus 568 for a Boeing 747.
* With first class, business and economy cabins, the A380 will seat 555 passengers. A 747 laid out the same way seats 416.
* The Airbus double-decker is the length of eight London buses and has enough room on its massive wings to park 70 cars. Cocktail bars, casinos, showers, libraries and sleeping quarters for staff tucked under the floorboards are among the novel ways airlines could use the A380's space.
* A wingspan of 261 ft 10 in means the A380 is too large for most airport docking bays.
