Rolls-Royce plans fundraising

UK-headquartered engineering giant Rolls-Royce has said it intends to carry out a fundraising in a bid to raise as much as GBP 2.50 billion.

The company said a rights issue is among the options being considered, while it may also conduct debt or equity issues and is reviewing all options.

Proceeds of the deal will be used to strengthen the group’s balance sheet.

The announcement follows a Financial Times report, which claimed the company was holding talks with the likes of GIC, among other sovereign wealth funds, over a potential investment.

That article stated that the cash call will be launched in early October.

Rolls-Royce declined to comment any further on the matter.

The firm describes itself as one of the world’s leading industrial technology companies.

Its operations are separated into three divisions: civil aerospace, power systems and defence.

Rolls-Royce generated revenue of GBP 5.56 billion in the first half of 2020, down from GBP 7.35 billion over the corresponding timeframe in the previous year.

It posted a loss of GBP 967.00 million for the six months, compared to gross profit of GBP 1.03 billion in H1 2019.

Reuters noted that the global coronavirus pandemic has had a considerable impact on the business, due to the resulting travel restrictions, and caused it to lay off more than 9,000 staff in May.

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In late August, the company said it would sell assets in a bid to raise at least GBP 2.00 billion.

Rolls-Royce has also completed an acquisition this year, having picked up Berlin-headquartered on and off-grid electrical storage battery manufacturer Qinous for an undisclosed consideration back in January.

Zephyr, the M&A database published by Bureau van Dijk, shows the largest deal targeting a transportation equipment manufacturer to have been announced worldwide during 2020 to date is valued at USD 20.18 billion.

That deal took the form of a capital increase as Russian aircraft maker Nauchno-Proizvodstvennaya Korporatsiya Irkut PAO unveiled a private placing worth USD 20.18 billion in July.

© Zephus Ltd

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