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Rolls-Royce deepens restructuring, may sell marine unit

2 min

London (AFP)

Rolls-Royce, the British maker of engines, announced further restructuring Wednesday that could result in the sale of its commercial marine business.

"Building on our actions over the past two years, this further simplification of our business means Rolls-Royce will be tightly focused into three operating businesses," chief executive Warren East said in a statement.

The company that makes power systems for use on land, at sea and in the air said it would study strategic options for its commercial marine operation, while reducing Rolls' businesses from five to three core units based around civil aerospace, defence and power systems.

East added: "This is the right time to be evaluating the strategic options for our commercial marine operation.

"The team there has responded admirably to a significant downturn in the offshore oil and gas market to reduce its cost base," said East, adding that the time was right to "consider whether its future may be better served under new ownership".

Rolls has shown signs of recovery since slumping to a record loss in 2016, when it was ravaged by a Brexit-fuelled collapse in the pound and a corruption fine.

But it powered back into profit during the first half of last year, propelled by strong deliveries for its Trent aircraft engines.

East is meanwhile shedding thousands of jobs as part of a restructuring programme that he implemented since becoming chief executive in 2015.

Investors welcomed Wednesday's announcement, with Rolls-Royce shares jumping almost six percent to 904 pence in late London trading.

On Monday, Rolls said it was considering whether to sell L'Orange, its German subsidiary.

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