23rd Nov 2015 13:19
LONDON (Alliance News) - Aerospace and defence engineer Rolls-Royce Holdings PLC on Monday said it has agreed changes to three joint ventures that are approved to provide maintenance of its Trent jet engines.
The FTSE 100-listed jet engines and propulsion systems manufacturer said the changes related to its Hong Kong Aero Engine Services Ltd, Singapore Aero Engine Services Pte Ltd and N3 Engine Overhaul Services GmbH and Co KG businesses.
Hong Kong Aero Engine Services is a joint venture with Hong Kong Aircraft Engineering Co Ltd and SIA Engineering Co Ltd, and Singapore Aero Engine Services is with SIA Engineering Co Ltd and with the Hong Kong Aero Engine Services business, while N3 is a joint venture with Lufthansa Technik AG, an arm of German airline Lufthansa AG.
Under the new agreements, the three joint ventures will now operate under a business model by which each of the joint ventures will have to compete to secure the engine overhaul work from Rolls-Royce's Trent engines.
Rolls-Royce will also increase its stakes in each of the joint ventures to half, which will include a USD206.5 million investment in total to increase its overall holding in the Hong Kong and Singapore businesses to 50%. The shareholding arrangement for the N3 business will remain unchanged at half.
"This announcement demonstrates our determination to work closely with our joint venture partners to build an even more competitive, capable and flexible Trent Service Network and to further improve our TotalCare services for our customers. The joint venture shareholding changes will also help to simplify our business," said Eric Schulz, the president of large civil engines at Rolls-Royce.
Shares in Rolls-Royce were up 2.4% to 565.375 pence on Monday, the best performer in the FTSE 100. Rolls-Royce is scheduled to provide details of its overall restructuring plans on Tuesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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