Rolls-Royce to strengthen balance sheet by $2 billion after it sells ITP Aero

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Rolls-Royce agreed to sell 100% shares of its Spanish subsidiary ITP Aero to a consortium led by Bain Capital Private Equity. 

Following the proposed sale, Rolls-Royce expects to receive cash proceeds of around €1.7 billion ($2 billion), which the company will use for strengthening its balance sheet. Chief executive officer Warren East said the decision to sell ITP Aero was “a significant milestone” in its disposal program which aims to support its “medium-term ambition to return to an investment-grade credit profile.” 

The British company is aiming to raise some £2 billion ($2.7 billion) via the disposal program. 

Even though Rolls-Royce  is selling its Spanish subsidiary, the company is set for further collaboration with ITP Aero in the future. 

“A financially, technologically, and industrially strong ITP Aero is also vital to Rolls-Royce. The company will remain a key strategic supplier and partner for decades to come,”East said in a statement dated September 27, 2021.

“We believe we have selected new owners willing to support the business for the long-term and build on its successful track record.” 

Meanwhile, Bain Capital, which leads a consortium of investors of Spanish and Basque companies, such as SAPA and JB Capital, hopes to help ITP Aero further diversify its customer base and develop sustainable aviation technologies for the next generation aircraft.

“This strategy will see ITP Aero maintain and grow its position as a leading supplier of critical engine components to key civil aviation and defense aircraft platforms, further diversifying its customer base and supporting the next generation of aircraft, including in sustainable and low carbon technologies,” Bain Capital disclosed in the statement.

The deal, which has been already approved by the Board of Rolls-Royce and the consortium members, is expected to close in H1 2022. However, the transaction still requires approval from the governments of Spain and the Basque region.


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