Rolls-Royce strengthens ITP joint venture
ITP will supply Rolls-Royce with turbines for future civil large engines in addition to its existing range of products supported by a revised shareholder agreement.
ITP is a joint venture between Rolls-Royce (46.9%) and a subsidiary of Sener (53.1%). The shareholdings of Rolls-Royce and Sener in ITP remain unchanged. Rolls-Royce and Sener have established a strong working relationship over many years and created the ITP joint venture in 1989. Today’s revised agreement marks another milestone in that long-standing partnership.
ITP provides high technology products and services to the aircraft and industrial engine market throughout the entire product life cycle. 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. The CFO of ITP is jointly appointed by Sener and Rolls-Royce, while Sener has the right to appoint the CEO.
ITP’s gross assets as at 31 December 2013 were €1.6 billion, with net income of €60 million and sales of €627 million in the year ended 31 December 2013. ITP employs over 3,000 professionals based in 18 operational centres in Spain, United Kingdom, Malta, US, Mexico, China and India. ITP is led by its CEO, Ignacio Mataix Entero.
Rolls-Royce accounts for the ITP joint venture in its 2014 Annual Report, consistent with IFRS 12. 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.
