Rolls-Royce shares are gaining on Wednesday after the company announced it has signed an agreement to sell its Bergen Engines medium speed liquid fuel and gas engines business to global engineering group Langley Holdings.
Langley is funding the deal worth €63m, with working capital requirements for the Bergen business going forward, from existing cash reserves.
“The agreed sale of Bergen Engines is a part of our ongoing portfolio management to create a more focused group and follows a strategic review of Bergen Engines,” Rolls-Royce said in a statement.
It will contribute to the company's target to generate at least £2bn from disposals, announced last year.
Sale proceeds of €70m from the transaction together with €40m of cash currently held within Bergen Engines, which is to be retained by Rolls-Royce, will help rebuild its balance sheet.
The sale includes the Bergen Engines factory, service workshop and foundry in Norway; engine and power plant design capability; and a global service network spanning more than seven countries.
Warren East, CEO of Rolls-Royce, said: “We believe that this agreement will provide Bergen Engines and its skilled workforce with a new owner able to take the business on the next step of its journey. The sale of Bergen Engines is a part of our ongoing portfolio management to create a simpler, more focused group and contributes towards our target to generate at least £2bn from disposals, as announced last year.”
Rolls-Royce shares have climbed 1.7% to 104.9p on Wednesday.
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