Babcock taps investors for £1.1bn to buy choppers

 

The engineering giant Babcock International is asking investors for £1.1bn as it pursues the purchase of the helicopter group Avincis – a deal 15 months in the making.

The £920m acquisition is not without controversy, however, as Avincis owns Bond Aviation, which has been hit by a spate of accidents in recent years. In December one of its helicopters, leased to the police, crashed into a Glasgow pub, killing 10 people, while in May 2012 a Bond-operated Super Puma ditched in the North Sea after a gearbox failure.

Babcock’s chief executive, Peter Rogers, said yesterday that the purchase, from the private equity-backed World Helicopters consortium, would cement Babcock’s reputation as one of the City’s hungriest groups for major acquisitions. Most famously, Babcock splashed out £1.3bn on its defence industry competitor VT Group in 2010.

Mr Rogers said: “We’re used to doing large deals. We’ve seen 11 of our top shareholders and they’ve all said that they will vote ‘yes’ for the deal.”

Once debt is included, Avincis will cost Babcock nearly £1.64bn. The helicopter group, whose consortium owners include the Italian fund Investindustrial and US firm Kohlberg Kravis  Roberts, flies what are described as “mission-critical services” such as air ambulances and police choppers.

Avincis has a fleet of 356 aircraft, of which 196 are owned by the company, and about 3,000 employees operating in 10 countries from Norway to Australia.

Shares in the FTSE 100 company fell nearly 7 per cent, or 91p, to 1,275p after the rights issue – offering five new shares at 790p a piece for every 13 – was unveiled.

Babcock’s advisers on the cash call will pick up fees totalling £45m. The bulk of these will go to lead underwriters JP Morgan Cazenove, Jefferies, Barclays and HSBC.

Babcock owns the Rosyth dockyard, on the Firth of Forth near Edinburgh, where the Royal Navy’s aircraft carriers are assembled.

As part of its rights issue prospectus, Babcock also outlined the risks of Scots voting for independence come September. “If Scotland becomes independent, there is likely to be a lengthy period of uncertainty in respect of the new Scottish government’s policies and their impact (some of which can be adverse) on the Babcock group’s ...  Scottish businesses,” the company said.

“There may also be a medium-term knock-on effect on the nature, timing and scope of the policies and procurement plans of the successor British state, especially in defence terms.”

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
tvGame of Thrones season 5 ep 4, review - WARNING: contains major spoiliers!
News
Tottenham legend Jimmy Greaves has defended fans use of the word 'Yid'
people
Life and Style
tech
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Sport
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living