BAE to carry out audit of Airbus

The A380 project has not gone as smoothly as hoped

Defence and aerospace group BAE Systems is to conduct an audit of Airbus to help it decide whether to sell its 20% stake in the planemaker to EADS.

An independent valuation valued the stake at 2.75bn euros (£1.9bn; $3.5bn).

BAE had hoped to receive double that amount for its shares, before recent disclosures about delays to deliveries of Airbus' A380 superjumbo jet liner.

It has now given Airbus two weeks' notice of its intention to conduct an audit. EADS declined to comment.

EADS is the biggest shareholder in Airbus, and it had been expected that BAE would sell its stake to the Franco-German firm.

However, that was put in doubt after an independent valuation of the BAE stake carried out by investment bank Rothschild.

Double resignation

"BAE Systems expects that the audit will assist its board in assessing whether or not to recommend that its shareholders vote in favour of the proposed disposal (of the stake)," BAE said in a statement.

"BAE Systems is required to give Airbus two weeks notice of its intention to undertake an audit. The audit is not anticipated to be completed before the end of August 2006."

The low valuation that BAE was given for its stake in Airbus came on the same day the bosses of EADS and Airbus both resigned.

EADS co-chief executive Noel Forgeard stepped down as he faced intense pressure in the wake of an insider trading scandal.

Airbus chief Gustav Humbert quit citing delays to the superjumbo.