diff --git a/target/ppc/excp_helper.c b/target/ppc/excp_helper.c
index bb17b65dc0..396e25ed35 100644
--- a/target/ppc/excp_helper.c
+++ b/target/ppc/excp_helper.c
@@ -556,7 +556,7 @@ static void powerpc_excp_74xx(PowerPCCPU *cpu, int excp)
     CPUState *cs = CPU(cpu);
     CPUPPCState *env = &cpu->env;
     target_ulong msr, new_msr, vector;
-    int srr0, srr1, lev = -1;
+    int srr0, srr1;
 
     if (excp <= POWERPC_EXCP_NONE || excp >= POWERPC_EXCP_NB) {
         cpu_abort(cs, "Invalid PowerPC exception %d. Aborting\n", excp);
@@ -669,7 +669,8 @@ static void powerpc_excp_74xx(PowerPCCPU *cpu, int excp)
         }
         break;
     case POWERPC_EXCP_SYSCALL:   /* System call exception                    */
-        lev = env->error_code;
+    {
+        int lev = env->error_code;
 
         if ((lev == 1) && cpu->vhyp) {
             dump_hcall(env);
@@ -683,17 +684,21 @@ static void powerpc_excp_74xx(PowerPCCPU *cpu, int excp)
          */
         env->nip += 4;
 
-        /* "PAPR mode" built-in hypercall emulation */
+        /*
+         * The Virtual Open Firmware (VOF) relies on the 'sc 1'
+         * instruction to communicate with QEMU. The pegasos2 machine
+         * uses VOF and the 74xx CPUs, so although the 74xx don't have
+         * HV mode, we need to keep hypercall support.
+         */
         if ((lev == 1) && cpu->vhyp) {
             PPCVirtualHypervisorClass *vhc =
                 PPC_VIRTUAL_HYPERVISOR_GET_CLASS(cpu->vhyp);
             vhc->hypercall(cpu->vhyp, cpu);
             return;
         }
-        if (lev == 1) {
-            new_msr |= (target_ulong)MSR_HVB;
-        }
+
         break;
+    }
     case POWERPC_EXCP_FPU:       /* Floating-point unavailable exception     */
     case POWERPC_EXCP_DECR:      /* Decrementer exception                    */
         break;