Leonardo is pursuing disposals to help offset the cost of a large acquisition and avoid ballooning its debt, according to the Italian defence and aerospace company.
“We are working on them,” Leonardo CEO Alessandro Profumo told analysts on 5 November. “We have ongoing talks with offerors. As soon as we have something discussed within the board [of directors], we will have an official communication on that.”
When Leonardo announced in April that it would buy a 25.1% stake in German defence sensor manufacturer Hensoldt for EUR606 million (USD702.6 million) in cash, it indicated that disposals would help it maintain a “solid capital structure”. The Hensoldt transaction is expected to close by year-end.
A potential disposal is the Automation Business Unit, which provides baggage handling systems for airports, as well as letter and parcel sorting systems for postal couriers.
The disposals were to be accompanied by an initial public offering (IPO) for American subsidiary Leonardo DRS. However, Leonardo placed that transaction on hold in March, saying “adverse” stock market conditions had prevented an “adequate valuation” of the business unit. Leonardo has indicated it might revisit the IPO when market conditions are more favourable.
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