LONDON (Reuters) - British engineering support services company Babcock International Group Plc (BAB.L) won a five-year contract to maintain four Victoria class submarines for Canada, which has an option to extend the deal to 15 years.
Babcock said in a statement on Tuesday the initial contract was worth C$250 million ($245 million) to the company, and up to C$1.5 billion if the deal ran for 15 years.
“This contract represents our first move into the international submarine support market, where we hope to build further on our existing expertise,” Chief Executive Peter Rogers said.
In Britain, Babcock is the sole provider of through-life support to the Royal Navy’s submarine fleet and owns the only facilities where nuclear submarines can undergo refuelling and deep refit work.
Babcock also manages the Clyde naval base in Scotland, where the majority of Royal Navy submarines are based and where in-service maintenance is carried out.
At 6:00 a.m. EDT, Babcock shares were down 2.1 percent at 601 pence, in a falling market.
Reporting by Dan Lalor; editing by Sue Thomas