finance news

Babcock and Rolls-Royce to sell their minority shares in AirTanker

Babcock and Rolls-Royce to sell their minority shares in AirTanker
Babcock and Rolls-Royce to sell their minority shares in AirTanker

Rolls-Royce, the UK-based engineering firm focused on world-class power and propulsion systems, and Babcock International Group, a British aerospace firm, are reportedly selling their minority stakes in AirTanker Holdings, a UK Gov military refueling jet unit, to Equitix Investment Management as part of their debt-reduction efforts.

According to credible reports, Rolls-Royce announced a £189 million ($261.39 million) agreement with Equitix for its 23.1% stake in AirTanker, while Babcock is selling £126 million ($174.04 million) for its 15.4% stake.

Rolls-Royce supposedly has a £2 billion disposal strategy in place to rebuild a financial sheet wrecked by the Covid-19 pandemic, while Babcock has set a £400 million target for asset sales, which it claimed it will reach once this agreement is completed.

AirTanker owns 14 A330 RAF Voyager planes, which are utilized by the British Ministry of Defence for refueling and transporting its fleets. Equitix will become a stakeholder alongside Airbus and Thales, albeit both the aerospace and defense firm have pre-emption rights over the shares being sold.

Meanwhile, Rolls-Royce and Babcock will each maintain a 23.5% share in AirTanker Services Ltd., the company that is in charge of operating the 14 planes.

The AirTanker consortium, located in Oxfordshire, England, distributes and supports 14 MRTT aircraft under a 27-year deal agreed upon in 2008. The RAF's "core fleet" consists of nine planes; the remaining five can be employed by the RAF or other clients. While in RAF service, the MRTT is known as the 'Voyager.'

Tom Bell, Rolls-Royce Defence president, stated that the company is honored to power the Voyager fleet. Through the company’s continued ownership in AirTanker, the Royal Air Force can rely on the refueling unit’s Trent 700 derivative engines to support mission-critical operations.

The transaction is subject to regulatory clearances, including those from the Ministry of Defence and the US Department of State.

Source credit: https://www.reuters.com/business/aerospace-defense/rolls-royce-sells-stake-refuelling-jets-unit-airtanker-261-mln-2021-09-13/

About the author

Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for newsorigins.com, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.