Rolls-Royce Holdings PLC and Babcock International Group PLC on Thursday said they completed the sale of their respective stakes in AirTanker Holdings Ltd to infrastructure-focused investment company Equitix Investment Management Ltd.
AirTanker Holdings provides end-to-end maintenance, military & civil flying programmes, training and aircraft upgrades.
Aerospace and defence company Rolls-Royce stated that it completed the sale of its 23% stake in AirTanker Holdings to Equitix for £189 million in cash.
The proceeds from the transaction will be used to rebuild its balance sheet in support of its medium-term ambition to return to an investment-grade credit profile, the London-based company said.
Separately, Babcock announced that it completed the sale of its 15% stake in AirTanker Holdings, also to Equitix.
London-based Babcock, which is an aerospace, defence and nuclear engineering services company, received a cash consideration of £95 million for the sale.
The deal is part of Babcock’s ongoing targeted disposal programme. This is the fourth disposal it completed, bringing gross proceeds generated to date to £448 million.
As part of this programme, Babcock also sold its subsidiary Frazer-Nash Consultancy to KBR Inc for £293 million in August and disposed of its UK Power business for £50 million in December to ‘streamline’ the company.
Both companies announced their plans to dispose of their stakes in AirTanker Holdings in September.
AirTanker Holdings is an asset joint venture with Airbus SE, Thales SA and Rolls-Royce. It owns 14 A330 Voyager aircraft, to support air-to-air refuelling, air transport and ancillary services for the UK Ministry of Defence.
As at March 31, AirTanker Holdings had gross assets of £2.7 billion.
Babcock noted that it still retained its 24% stake in AirTanker Services, the operator AirTanker Holdings’ aircraft.
Shares in Rolls-Royce were up 1.2% at 121.26 pence each on Thursday morning in London.
Babcock shares were trading 0.7% higher at 306.21 pence each.
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