Rolls-Royce Holdings selected a UK government contractor as the preferred bidder for its marine engine manufacturing arm after an earlier sale to a Russian group was vetoed by Norwegian politicians.
Sky News has learned that Rolls Royce is rushing to complete the sale of Bergen Engines to Langley Holdings, a Nottinghamshire-based industrial conglomerate, ahead of engineering giant FTSE-100’s half-year results this week.
Sources in the city said Tuesday that Rolls-Royce was in advanced talks with Langley, a relatively low-profile company that nevertheless employs more than 4,000 people.
A deal could be announced on Thursday along with the earnings of the London-listed company, they added.
Proceeds from the sale of Bergen would not be financially significant, but would demonstrate progress towards a multibillion pound divestiture target set by chief executive Warren East as he prepares to rebuild his balance sheet.
Last month, Sky News reported that Rolls-Royce was also in talks with sell your stake in AirTanker, the company responsible for in-flight refueling for the RAF Voyager fleet.
He is separately engaged in a process of selling ITP Aero, a company based in Spain – another auction that has encountered national security hurdles.
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 being a sub-contractor to the Department of Defense, managing the equipment and services of the Coulport Underwater Missile Loading Facility in Scotland.
Langley also works with NATO forces, making Oslo’s objections to the previous Bergen sale redundant, according to those informed of the agreement.
The potential buyer was created by Tony Langley in 1975 and has six main divisions, according to the company’s website.
It employs around 4,600 people in total.
The price Rolls-Royce and Langley are discussing in relation to Bergen was unclear on Tuesday, although analysts estimated it could be worth more than Â£ 50million.
Rolls-Royce relaunched the maritime arm auction 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 the Norwegian government for the deal with Langley.
Deloitte advises Rolls-Royce on the sale.
Mr East has set a target of Â£ 2bn for proceeds from the sale of assets after raising more than Â£ 5bn through the issuance of new debt and equity.
Rolls-Royce CEO was forced to ax thousands of jobs, many in Britain, after seeing its aviation customers grounded for much of the past 18 months.
In March, the company reported a loss of Â£ 4 billion, prompting it to resort to drastic measures, including a two-week summer shutdown of its engine factories.
Its shares recovered some of the lost ground and were trading at around 102p on Tuesday, giving Rolls-Royce a market cap of just over Â£ 8.65 billion.
A Rolls-Royce spokesperson declined to comment, while Langley did not respond to a request for comment.