Rolls-Royce and Babcock Sell Stakes in AirTanker Holdings

Voyager Tanker. Image  – Royal Air Force

Rolls-Royce and Babcock Engineering announced that they have reached an agreement with Equitix Investment Management Limited to sell their respective stakes in AirTanker Holdings Limited.

AirTanker Holdings Limited, a joint venture with Airbus, Babcock, Rolls-Royce, and Thales, owns 14 A330-200 Voyager aircraft. The Voyager aircraft support air-to-air refueling, air transport, and ancillary services for the U.K. Ministry of Defence.

Rolls-Royce has agreed to sell its 23.1 percent shareholding for GBP189 million ($261 million) in cash, including the repayment of shareholder loans and accrued and deferred interest of approximately GBP47 million ($65 million), subject to any routine closing adjustments and before transaction costs. The sale is part of an overall cost-cutting effort, and Rolls-Royce will use the proceeds to reduce debt.

Babcock has agreed to sell its 15.4 percent stake in AirTanker for GBP126 million ($174 million) in cash, including the repayment of shareholder loans of GBP31.1 million ($43 million), subject to any routine closing adjustments and before transaction costs. The sale is part of Babcock’s ongoing targeted disposal program, which aims to generate at least GBP400 million of proceeds to reduce debt.

Rolls-Royce and Babcock will continue to hold their respective 23.5 percent stakes in AirTanker Services Limited, which provides servicing and maintenance for the Voyager aircraft in support of the Royal Air Force.

The transaction is expected to complete by the end of the first quarter of 2022, subject to regulatory approvals. Remaining AirTanker shareholders have pre-emption rights over the shares for sale.

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About Richard Pettibone

A military history enthusiast, Richard began at Forecast International as editor of the World Weapons Weekly newsletter, eventually moving to the company's premier newsletter service, World Aerospace & Defense Intelligence (WADI). Richard is the current editor of the Defense & Aerospace Companies, Volume I (North America) and Volume II (International) services. The two books provide detailed analyses of major aerospace and defense contractors. As a contributor to Aviation Week & Space Technology's 2005 and 2006 Aerospace Source Book, he authored the Prime Contractor & Major Manufacturer profiles. Find out more at www.forecastinternational.com

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