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Rolls-Royce hires Deloitte to propel boat engine sale

Rolls-Royce
Rolls-Royce

Rolls-Royce has hired Deloitte to run the sale of its Bergen Engines division as the troubled engineering giant scrambles to bolster its finances.

A collapse in air travel has plunged Rolls into its biggest crisis since its bankruptcy in the Seventies.

Chief executive Warren East has been forced to put unwanted divisions on the market.

With around half of Rolls’s annual £15bn revenues being made from building and servicing aircraft engines, Mr East has also had to tap shareholders, lenders and the Government for support.

Bergen makes large diesel and gas-driven engines used to generate electricity to power ships. Sources say a sale is expected early in the new year with a price tag of up to £100m.

Last year Bergen recorded an £18m underlying operating loss on sales of £239m, and the division took a £58m impairment.

Market sources have pointed to MAN, the German diesel engine business, and Finland’s Wärtsilä as potential buyers.

Two years ago Rolls agreed a £500m deal to sell its commercial marine business in Scandinavia to Norway’s Kongsberg, which could be in the running.

Last week shareholders backed a £2bn rights issue to help bolster Rolls’s battered balance sheet. This was part of a £5bn funding package that also included a £1bn extension to a taxpayer guarantee and £2bn of new loans.

Rolls has already announced it is cutting 15pc of its staff – some 9,000 jobs – mainly in the civil aerospace arm, and is also selling its ITP aerospace engine parts unit.

This week the company also faces its first major strike for nearly 50 years as workers at its Lancashire plant walk out over the production of turbine blades being relocated to Singapore.