Rolls-Royce Soars on Order for B-52 Engines, ITP Sale to Bain Consortium

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Rolls-Royce Soars on Order for B-52 Engines,  ITP Sale to Bain Consortium
Credit: © Reuters.

By Dhirendra Tripathi – Rolls Royce (LON: RR ) stock (OTC: RYCEY )  climbed nearly 11% in London on a double boost from a new order to supply new B-52 engines and the sale of its ITP Aero unit to Bain Capital.

The company will supply 650 engines from its F-130 family over 30 years to equip the United State Air Force’s B-52 'stratofortress' planes, a valuable, long-term order that promises steady cash flows for the group's military aviation unit.  

In a separate announcement, Rolls-Royce said it will sell 100% of its Spanish-based unit ITP Aero for approximately €1.7 billion (around $2 billion) to a consortium led by Bain Capital Private Equity. The Spanish company will remain a key long-term strategic supplier to Rolls-Royce, according to a note by the latter.

Rolls-Royce said the transaction, expected to close in the first half of 2022, will help rebuild its balance sheet and support medium-term ambition to return to an investment-grade credit profile. The company closed the first half of 2021 with net debt of 3.1 billion pounds (around $4.25 billion).

The twin announcements add to more good news for the company that was announced last week, when the U.S. announced it would ease restrictions on transatlantic travel, allowing access to vaccinated passengers arriving from the EU and U.K.. The U.K. for its part also announced an easing of testing requirements for passengers arriving from abroad. Shares of airline companies, Rolls-Royce’s biggest clients, have bounced since the announcements.



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