BAe Taiwan plan funded

BRITISH AEROSPACE'S joint venture with Taiwan on regional jets cleared its final hurdle yesterday as the Taiwanese government and a local banking consortium agreed financing for the new business, writes Michael Harrison.

Yang Shih-chien, Taiwan's Economics Minister, said the banking consortium, led by the state-owned Chiao Tung Bank, would provide dollars 400m in low-interest loans to finance an aircraft lease sales facility and a further dollars 60m in operating funds, while the Taipei government would lend the joint venture up to dollars 7bn to finance development of a future range of regional jets.

The announcement ended weeks of uncertainty over whether the new joint venture business, Avro, would go ahead and helped BAe shares put on a fresh spurt to close 7p higher at 427p.

BAe raised dollars 250m in January by selling the Taiwan Aerospace Corporation a half-share in its regional jets division. The joint venture will manufacture the new Regional Jet, the successor to the BAe 146, in both Britain and Taiwan.