4th Aug 2021 08:56
(Alliance News) - Rolls-Royce Holdings PLC on Wednesday said it has agreed to sell Bergen Engines to Langley Holdings PLC for an enterprise value of EUR63 million.
Rolls-Royce is a London-based jet engine maker and Bergen Engines is a fully owned subsidiary of it, operating as a medium speed liquid fuel and gas engines business in Norway.
The sale to industrial equipment firm Langley includes Bergen Engines' factory, service workshop and foundry.
Rolls-Royce said the agreed sale follows a strategic review of Bergen Engines. It said the sale will help the company reach its target of generating GBP2 billion from disposals and returning to "an investment grade credit profile".
"Sale proceeds of EUR70 million from the transaction together with EUR40 million of cash currently held within Bergen Engines which is to be retained by Rolls-Royce, will be used to help rebuild the Rolls-Royce balance sheet," Rolls-Royce said.
Langley - based in Retford, Nottinghamshire - will fund the purchase from existing cash reserves.
The sale follows Rolls-Royce's aborted deal earlier in the year, in which the Norwegian government blocked the EUR150 million proposed sale of the Bergen unit to TMH Group, a privately owned company headquartered in Russia that makes locomotives and rail equipment.
The Norwegian government blocked the sale on national security concerns, as Norway's army is among Bergen's customers.
Rolls-Royce on Wednesday said it has notified the Norwegian government of the agreed sale.
Bergen Engines will be operated by Langley Group as a stand-alone business.
Shares in Rolls-Royce were up 1.5% at 104.70 pence in London on Wednesday morning trading.
By Josie O'Brien; [email protected]
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