Rolls-Royce and Babcock International have confirmed the sale of their respective shareholdings in AirTanker Holdings Ltd. to private equity firm Equitix Investment Management Limited.
A joint venture between Rolls Royce, Airbus, Babcock, and Thales, AirTanker Holdings Limited owns fourteen A330-200 Voyager aircraft which are powered by Rolls Royce Trent 772B engines. The widebody jets, which support air-to-air refuelling, air transport and ancillary services for the UK Ministry of Defence, are operated by AirTanker Services Limited t/a AirTanker (9L, Brize Norton).
In a stock market announcement, Rolls Royce said it has agreed to sell its 23.1% stake in AirTanker Holdings Ltd. to Equitix for a cash consideration of GBP189 million pounds (USD261.2 million). The sale includes the repayment of shareholder loans and accrued and deferred interest of approximately GBP47 million (USD65 million), subject to any routine closing adjustments and before transaction costs. The transaction is expected to complete by the end of the first quarter of 2022, subject to regulatory approvals. Rolls Royce will use the proceeds to reduce its net debt, it said.
For its part, Babcock will sell its 15.4% stake in AirTanker Holdings Ltd. for a cash consideration of GBP126 million (USD 174 million), also including the repayment of shareholder loans of GBP31.1 million (USD43 million) and also subject to any routine closing adjustments and before transaction costs.
Both Rolls Royce and Babcock have said that despite their exit from the holding company, they will retain their respective 23.5% stakes in AirTanker Services Ltd.
Rolls Royce said the sale forms part of an overall Group plan to raise at least GBP2 billion (USD2.76 billion) from disposals, the proceeds of which would be used to help rebuild its balance sheet in support of its medium-term push to return to an investment grade credit profile. For its part, the divestment is the third disposal Babcock has announced as part of its ongoing programme to streamline its group operations and to raise at least GBP400 million (USD553 million) of disposal proceeds this financial year.
