The Government advises Rolls-Royce that it will prevent it from selling ITP to venture capital

The Spanish government has warned Rolls-Royce that any sale by the Basque manufacturer of aircraft parts for aircraft ITP Aero is liable to be blocked unless the buyer offers guarantees about the future of the company, according to sources familiar with the aforementioned situation. by Bloomberg. The Executive is concerned that the British company will sell ITP Aero to a venture capital fund that does not have a clear industrial plan or a commitment to its operations in Spain, according to sources cited by Bloomberg.

Rolls-Royce has a list of bidders that includes KKR, Bain and TowerBroo. TowerBrook already owns aircraft parts supplier Aernnova. The British firm is trying to sell this subsidiary, based in Zamudio (Bilbao) in an operation that could reach 1,500 million euros. The second round of bids will arrive in May, after Carlyle and CVC have abandoned the bidding.

The Government has informed Rolls-Royce that it must find an industrial or a consortium that includes it if it wants to sell the company. The buyer must commit to maintaining ITP’s headquarters and operations in Spain and must present a clear industrial plan. The Government will not allow any speculative operation.

The British company wants to divest itself of the Spanish aeronautical equipment supplier as part of a plan to achieve more than 2 billion pounds (about 2.3 billion euros) from the sale of assets. The British company is coming off a difficult year in which it has cut 7,000 jobs, as the coronavirus crisis grounded wide-body aircraft that use ITP engines.

Spain has the power to block the acquisitions of companies that it considers strategic assets in the event that the buyer is foreign. “The Spanish and Basque governments are important and there is a continuous and constructive dialogue with them,” a Rolls-Royce spokesperson told Bloomberg. “ITP Aero is going to be a key partner for Rolls-Royce for many decades. Consequently, it is very important to us that a new owner can continue to invest in ITP Aero technology, innovation and manpower.”

A possible solution would be through the alliance of the Burgos Aciturri with one of the other potential buyers. ITP and Aciturri are among the four Spanish aircraft parts manufacturers, along with Aernnova and Alestis. The government would welcome the consolidation of the sector, according to Bloomberg.

A spokesperson for the Spanish Ministry of Industry Spanish Ministry of Industry declined to comment on this information. European governments have increased their scrutiny of acquisitions by foreign investors in the aftermath of the pandemic, with the aim of preventing valuable assets from being sold below their real price.

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