Rolls-Royce picks British bidder for marine arm after Norwegian veto
Written by Hit Music Radio News on 03/08/2021
Rolls-Royce Holdings has picked a UK government contractor as the preferred bidder for its maritime engine manufacturing arm after an earlier sale to a Russian group was vetoed by Norwegian politicians.
Sky News has learnt that Rolls-Royce is racing to finalise the sale of Bergen Engines to Langley Holdings, a Nottinghamshire-based industrial conglomerate, ahead of the FTSE-100 engineering giant’s half-year results this week.
City sources said on Tuesday that Rolls-Royce was in advanced talks with Langley, a relatively low-profile business which nevertheless employs more than 4000 people.
A deal could be announced alongside the London-listed company’s earnings on Thursday, they added.
The proceeds of the Bergen sale would not be material in a financial sense but would demonstrate progress towards a multibillion pound disposal target set by chief executive Warren East as he plots the rebuilding of its balance sheet.
Last month, Sky News reported that Rolls-Royce was also in talks to sell its stake in AirTanker, the company responsible for mid-air refuelling of the RAF’s Voyager fleet.
It is separately engaged in a process to sell ITP Aero, a Spanish-based business – another auction which has run into national security-related obstacles.
Langley Holdings is a multinational engineering and industrial group operating through dozens of subsidiaries.
These include Wellman Booth and Clarke Chapman Facilities Management, the latter of which is a contractor for the Ministry of Defence, managing equipment and services at the Coulport submarine missile loading facility in Scotland.
Langley also works with NATO forces, rendering Oslo’s objections to the previous Bergen sale redundant, according to people briefed on the deal.
The prospective buyer was established by Tony Langley in 1975, and has six main divisions, according to the company’s website.
It employs about 4600 people in total.
The price that Rolls-Royce and Langley are discussing in relation to Bergen was unclear on Tuesday, although analysts have estimated that it could be worth .
Rolls-Royce restarted the auction of the marine arm in May, two months after the Norwegian government vetoed its sale to TMH, a Russian company, on national security grounds.
The Derby-based group is expected to seek formal clearance from Norway’s government for the deal with Langley.
Deloitte is advising Rolls-Royce on the sale.
Mr East has set a £2bn target for asset sale proceeds after raising more than £5bn from the issue of new debt and equity.
The Rolls-Royce chief executive has been forced to axe thousands of jobs, many of them in Britain, after seeing its aviation customers grounded for much of the last 18 months.
In March, the company reported a £4bn loss, prompting it to resort to drastic measures including a two-week summer shutdown of its engine factories.
Its shares have recovered some of their lost ground, and were trading on Tuesday at around 102p, giving Rolls-Royce a market capitalisation of just over £8.65bn.
A Rolls-Royce spokesman declined to comment, while Langley did not respond to a request for comment.
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