ARG.L Regulatory News (ARG)

10 May 2005 07:01

ArmorGroup International plc10 May 2005 10 May 2005 ArmorGroup International plc Wins U.S. Department of State weapons removal contract ArmorGroup International plc, the leading international provider of defensiveprotective security services and security training services, announces todaythat a team headed by ArmorGroup North America has been awarded a prime contractby the United States Department of State's Office of Weapons Removal andAbatement. The ArmorGroup team is one of three contractor groups selected forthe conduct of a five year global integrated weapons removal and abatementprogramme which could extend to $500 million if all options are exercised. The programme provides for all aspects of humanitarian mine action as well asthe destruction of small arms/light weapons and hand held surface to airmissiles in areas of recent conflict worldwide. The potential value of theindefinite delivery/ indefinite quantity (ID/IQ) agreement, which has one baseyear and four option years, is guaranteed at US $100,000 per awardee and couldbe approximately US $100 million per year if all annual options are exercised,and will be split between the three prime contractors. Projected revenues foreach prime contractor from this contract are undeterminable at this earlyjuncture due to the ID/IQ nature of the agreement and will depend on thespecific work orders awarded to each. Under the terms of the award, the ArmorGroup team will compete for specificprojects with the other selected groups to provide project management, mineclearance, mine risk education, victim assistance, weapons stockpiledestruction, and logistical support and training of local authorities to conductall facets of humanitarian mine action. The full ArmorGroup team will include:Cranfield University, the leading strategic consultancy on humanitarian mineremoval; AlphaInsight, an award-winning Information Technology contractor thatprovides significant services to the U.S. Department of State; EnvironmentalChemical Corporation, a recognized subject matter expert in small arms,munitions, weapons systems and UXO removal and destruction services; and EG&G, aworld wide leader in stockpile remediation and demilitarisation. Jerry Hoffman, Chief Executive Officer, commenting on the contract said: "We areextremely proud to be a part of the U.S. Department of State's Office of WeaponsRemoval and Abatement team. This contract, which significantly builds our mineand unexploded ordnance removal business, is vital to the humanitarian reductionof landmines and unauthorized weapons worldwide. This award is in line with ourstrategy to grow the business organically by pursuing larger, more demandingcontracts and demonstrates the Department of State's confidence in our expertiseand ability to support their global programmes. The classified information required to carry out certain of the projects to beperformed pursuant to this contract will require ArmorGroup North America Inc.and/or International Training Inc, two of the Group's U.S. subsidiaries, to putin place arrangements to insulate them from the foreign control or influencewhich arises by virtue of their ultimate parent, ArmorGroup International plc,being a UK based entity. To achieve this, the Company intends to follow commonmarket practice in such scenarios and will shortly enter into Proxy Agreements.Further details of these Proxy Agreements are contained in the Notes to Editorsbelow. Enquiries: ArmorGroup International plcJerry Hoffman, Chief Executive Officer Tel: +44 (0) 20 7808 5800Nick Melson, Communications Manager ArmorGroup North AmericaGeorge Connell, President Tel: +1 (703) 356-0002 Citigate Dewe RogersonPatrick Toyne Sewell/Sarah Gestetner Tel: +44 (0) 20 7638 9571 Notes to Editors ArmorGroup International plc. ArmorGroup, which has its headquarters in London and a major office inWashington DC, has over 7,700 employees and operations in over 26 countries. Itprovides its services principally to first world national governments, majorinternational inter-governmental organisations and multinational corporations.It operates principally in regions of the world with diminished law and order orwith a high risk of terrorism or which were former areas of conflict includingthe Middle East, Africa, South America, the CIS and Asia. The Group listed onthe London Stock Exchange in December 2004. For more information please visitwww.armorgroup.com. The use of Proxy Agreements has been regularly used by non-U.S. companies in thesecurity industry with operating subsidiaries in the United States that couldpotentially have access to U.S. classified information. The integrity of theclassified information is protected by appointing three Proxy Holders to haveauthority to exercise all voting rights with respect to shares owned by theforeign company, in our case, ArmorGroup International plc, in its U.S.subsidiaries. It is anticipated that the terms of the Proxy Agreements willrequire the Proxy Holders not to accept direction from the Company nor permitthe Company to exercise any control or influence over the US subsidiaries.However, the Proxy Holders will be obliged under these arrangements to act ingood faith to protect the legitimate economic interests of the Company and willnot be entitled to carry out certain fundamental actions without the expresswritten approval of the Company. The use of Proxies does not in any way impactthe financial reporting or recognition of revenues earned by such contracts,merely the access to classified information to any foreign entities or employeesand the ownership control exerted by the foreign parent on its U.S. subsidiary. This information is provided by RNS The company news service from the London Stock Exchange