Rolls-Royce strengthens JV agreement
AERO engine manufacturer Rolls-Royce has strengthened one of its long-term joint venture agreements.
The partnership agreement – Industria de Turbo Propulsores (ITP) – is with Sener Grupo de Ingenieria. ITP supplies Rolls-Royce with turbines for future civil large engines in addition to its existing range of products supported by a revised shareholder agreement.
Sener (53.1%) is the majority shareholder in the JV and Rolls-Royce (46.9%) has said this arrangement will not change.
As part of the original shareholder agreement signed in 2003, Sener has a put option for its shares in ITP to Rolls-Royce. The option is valued by using an agreed formula and valuation mechanism that represents fair market value. The put option can be exercised during a certain period every year.
“Rolls-Royce and Sener have established a strong working relationship over many years and created the ITP joint venture in 1989. (The) revised agreement marks another milestone in that long-standing partnership,” said Rolls-Royce in a statement.
ITP provides high technology products and services to the aircraft and industrial engine market. Its activities cover the design, research, development and manufacturing, as well as the assembly and testing, of aircraft engines. ITP participates on all of Rolls-Royce’s existing Trent programmes through risk and revenue sharing agreements.
“The revised shareholder agreement ensures security of supply of turbines and the continued access by Rolls-Royce to relevant ITP engineering and R&D capabilities,” it added.
The CFO of ITP is jointly appointed by Sener and Rolls-Royce, while Sener has the right to appoint the CEO – who is currently Ignacio Mataix Entero.
ITP’s gross assets as at December 2013 were €1.6bn, with net income of €60m and sales of €627m for the year. It employs more than 3,000 people across 18 operational centres in Spain, the UK, Malta, US, Mexico, China and India.
