Engineering giant Rolls-Royce and defence contractor Babcock have agreed to sell their stakes in re-fuelling business AirTanker Holdings.
Their shares in the firm, which holds assets used by a joint venture that provides aviation services for the UK Royal Air Force’s Voyager fleet, will be sold to Equitix Investment Management.
Rolls-Royce said it will net £189 million for its 23.1% share in the joint venture, with Babcock set to secure £126 million for its holding of just over 15%.
Both companies have been keen to raise funds through disposals in recent years, particularly amid pressure on the aviation sector following the heavy impact of the pandemic.
AirTanker Holdings is a joint venture which was also owned by Airbus and Thales.
However, all four firms will retain their stakes in the AirTanker Services business which operates the fleet of refuelling jets.
Rolls-Royce said the deal is expected to be completed in the first quarter of 2022.
Tom Bell, president of Rolls-Royce Defence, said: “The sale of our shareholding in AirTanker Holdings is another important step towards achieving our group target to generate at least £2 billion from disposals, as announced last year, to help rebuild our group balance sheet in support of our medium-term ambition to return to an investment grade credit profile.”
David Lockwood, Babcock chief executive officer, said: “This the third disposal we have announced as part of our ongoing programme to streamline the group and, should all complete, ensures we will meet our target of generating at least £400 million of disposal proceeds this financial year.
“We are pleased to continue to maintain an interest in AirTanker through our work with AirTanker Services.”
Shares in Babcock and Rolls-Royce both climbed higher in early trading.