Helicopter arm facing break-up at Babcock

Helicopter arm facing break-up at Babcock in deal that could be worth £400m

  • Firm has hired bankers to carry out a ‘strategic review’ of its helicopter arm 
  • It comes after the Babcock unveiled £2bn of writedowns 

Defence contractor Babcock International is working on a break-up and sale of its helicopter services unit as part of a deal that may generate up to £400million.

City sources said the embattled FTSE 250-listed defence and engineering giant, which builds ships for the Ministry of Defence, has hired bankers from HSBC to carry out a ‘strategic review’ of its helicopter services business.

Babcock’s aviation division provides helicopters for mountain rescues and planes that release water for fighting fires.

Babcock’s aviation division provides planes that release water for fighting fires

Sources said the whole of the helicopter services business may not be for sale, with the firm keen to retain operations in the UK and France. But the review could lead to a disposal of the aviation businesses in countries such as Italy, Spain and Portugal.

Buy-out firms including CVC Capital Partners, one of Britain’s largest private equity houses, and Cinven are said to be interested.

City sources said the division on the block generates revenues of around £350million. 

The move to sell parts of the helicopter unit comes after the company unveiled £2billion of writedowns and said it would look to raise fresh funds to avoid an equity capital raising.

Babcock’s shares have tumbled from £12 in 2014 to 340.4p on Friday.

Former Cobham boss David Lockwood was appointed as chief executive in 2020 to improve the business. Babcock declined to comment.

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