Rolls-Royce has agreed to sell its 23.1 per cent stake in aero-engine manufacturer AirTanker Holdings for £189million.
The British engineering giant said the sale to Equitax Investment Management would enable it to pay off some of its debts, which have ballooned as a result of the pandemic.
Rolls-Royce, which will continue to hold a 23.5 per cent stake in AirTanker Services, wants to raise £2billion to fix its balance sheet.
Roll-Royce is under pressure to raise £2bn to pay off its debt after the pandemic
AirTanker Holdings is a joint venture between Airbus, Babcock, and Thales, and it is the owner of 14 A330 refuelling jets.
The AirTanker Services business, which Rolls-Royce will continue to hold a stake in, operates the 14 jets that are mainly used by the Ministry of Defence.
Rolls-Royce will continue to provide servicing and maintenance for the fleet of its engines that power the Voyager aircraft to support the Royal Air Force.
President of Rolls-Royce Defence Tom Bell said: ‘Through our continued ownership position in AirTanker Services, the Royal Air Force can rely on us to support its mission critical operations with our Trent 700 derivative engines.
‘The sale of our shareholding in AirTanker Holdings is another important step towards achieving our group target to generate at least £2bn from disposals, as announced last year, to help rebuild our group balance sheet in support of our medium-term ambition to return to an investment grade credit profile.’
The engineering giant will continue to hold a 23.5% stake in AirTanker Services
The £189million deal includes the repayment of shareholder loans and accrued and deferred interest of approximately £47m, and is expected to complete by the end of the first quarter of 2022.
Rolls has been under pressure from US-based activist shareholder Causeway Capital, which last month demanded a board shake-up.
In response, Rolls-Royce issued a robust defence of its Power Systems business amid suggestions from its biggest shareholder that the division should be sold off.
Rolls-Royce shares were flat at 109.4p at 11am today.
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