Rolls-Royce ends talks with Kuwait fund, GIC: Report

LONDON • Rolls-Royce Holdings ended talks to raise £500 million (S$881 million) from sovereign funds in Singapore and Kuwait and will instead seek to raise £2 billion from existing shareholders, Sky reported.

Current owners opposed the dilution that would occur if outside investors are brought into the £2.5 billion fund-raising effort, it reported, citing a person familiar with the matter.

Sky News had earlier reported that Singapore's GIC and Kuwait Investment Office were considering an investment in the engine maker.

The British maker of aircraft engines was likely to unveil a financing package as early as yesterday that included additional borrowing power, Sky said.

Rolls-Royce has lost more than 80 per cent of its value this year, touching a fresh 17-year low on Wednesday amid a broad industry downturn triggered by the coronavirus pandemic.

The company has been hit particularly hard by the drop in long-distance travel, which has sharply curtailed demand for the wide-body planes powered by its engines.

Many aircraft in the existing fleets have been temporarily or permanently grounded, depriving Rolls-Royce of the vital maintenance revenue it collects when they fly.

Rolls-Royce has also seen its debt downgraded to junk this year, meaning borrowing would come at a higher cost than before the pandemic.

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