Babcock has completed the sale of its oil and gas aviation business to CHC Group for a cash consideration of GBP10 million.

The oil and gas business, which is part of the group's aviation sector, provides offshore O&G crew transportation services in the UK, Denmark and Australia. It is headquartered in Aberdeen in the UK, employs over 500 people and operates around 30 aircraft across its three locations.

For the year ending 31 March 2021, it had revenue of GBP154 million, a loss before tax of GBP2 million and underlying operating profit of GBP2 million. As of 31 March 2021, it had gross assets of GBP256 million, net assets excluding cash of GBP21 million and net lease liabilities of GBP142 million.

The sale is part of Babcock's targeted disposal programme, which aims to generate at least GBP400 million of proceeds. Proceeds from this transaction will be used to reduce net debt.

The agreement constitutes a Class 2 transaction for the purposes of the UK Financial Conduct Authority's listing rules and as such does not require Babcock shareholders' approval.

Babcock CEO David Lockwood says: “This disposal is part of our plan to streamline and focus the group on our key markets. Divesting at least GBP400 million of businesses will enable us to reduce complexity and increase our focus as we return Babcock to strength. The oil and gas aviation business has found a new home and we wish it all the best for the future.”

CHC president and CEO David Balevic adds: “This acquisition is a great success, opening new and broader opportunities for CHC both in existing markets like Australia and the North Sea, and in new areas. It further cements CHC’s position as one of the world’s leading providers of helicopter transportation to oil and gas, search and rescue, and renewables customers. Enabling CHC to better serve the changing needs of both our new and existing customers, this acquisition illustrates our strategy to build on our strengths and positions us for growth. I am excited by the opportunity to bring together these two great aviation organisations. The acquisition, once implemented, will strengthen CHC’s ability to deliver outstanding levels of service and safety, and expand our global customer offering.”