Britain’s Rolls-Royce agreed to sell its Bergen Engines unit to Russia-based TMH Group for net proceeds of 150 million euros ($180 million), making initial progress with a disposal plan aimed at helping it survive the pandemic.
The aero engines-maker is aiming to raise 2 billion pounds in total from asset sales, and the disposal of Norwegian-based Bergen announced on Thursday follows that of another small business, its civil nuclear instrumentation unit, last December.
COVID-19 has shattered Rolls-Royce’s finances because it is paid by airlines on a flying-hours basis, and the company warned last week that travel would be even more constrained than it expected this year, meaning higher cash outflows.
The major part of Rolls-Royce’s disposal plan will be the sale of its Spain-based ITP Aero. Analysts have said smaller units would make up the remainder of the disposal target.
“The sale of Bergen Engines is a part of our ongoing portfolio evaluation to create a simpler, more focused group and contributes towards our target to generate at least 2 billion pounds from disposals,” Rolls-Royce CEO Warren East said.
From its factory in Norway, Bergen makes medium-speed gas and diesel engines for marine and power generation customers and employs about 950 people. It generated revenues of 239 million pounds in 2019, said Rolls-Royce.
TMH Group is a supplier of rail rolling stock and will fold Bergen into its TMH International branch, said the Rolls-Royce statement.
Source: Reuters.com