Rolls-Royce plans to improve its finances by selling Spanish subsidiary Industria de Turbo Propulsores (ITP Aero) to a consortium for approximately EUR1.7 billion (GBP1.5 billion, USD2 billion), the British engine manufacturer announced on 27 September.
The consortium is led by US investment firm Bain Capital and includes Spanish financial services firm JB Capital Markets and Spanish defence contractor SAPA. The group intends to invest in ITP Aero to grow its “products, regions, and customers, and further enhance its status as a Spanish national champion”, the announcement said.
The deal calls for Carlos Alzola to remain CEO of ITP Aero and for the company to keep its headquarters and decision making in Zamudio, Spain. The transaction is expected to close in the first half of 2022, after receiving regulatory approval.
ITP Aero builds commercial and military aircraft engines and has about 4,300 employees. While ITP Aero works in commercial aerospace, it also supports several defence programmes, including the Future Combat Air System project launched by France and Germany.
Rolls-Royce indicated over a year ago that it was exploring selling ITP Aero as part of an effort to raise at least GBP2 billion to shore up its balance sheet, which has been hit hard by the Covid-19 pandemic-fuelled commercial air travel slump. Rolls-Royce transferred its Hucknall, England, facility, including about 700 employees, to ITP in May to make the subsidiary more attractive to a potential acquirer.
Other divestitures that Rolls-Royce recently agreed to include the sale of Norway-based Bergen Engines to UK engineering business Langley Holdings for EUR110 million (GBP94 million), and the sale of a minority stake in the AirTanker Holdings Ltd joint venture to UK private equity firm Equitix Investment Management for GBP189 million.
Looking to read the full article?
Gain unlimited access to Janes news and more...
