Dubai Plots Sale Of UK Engineer Doncasters

One of Britain's most advanced privately owned engineering groups is about to be put up for sale more than eight years after being acquired by Dubai's ruling family.

Sky News understands that investment bankers will be appointed in the coming weeks to advise on the sale of Doncasters, a Burton-upon-Trent-based company which manufactures precision components for aircraft engines and industrial gas turbines.

Doncasters, which traces its roots back to 1778 when it was established in Sheffield, specialises in working with metals and alloys that are difficult to shape, and counts Boeing and Rolls-Royce among its major customers.

The company has been owned by Dubai International Capital (DIC) since 2006, when the emirate had grand ambitions to become one of the world's most prolific private equity investors.

The price tag that DIC will attach to Doncasters is unclear, but bankers said that it was likely to be valued at well over £1bn.

The current owner had already appointed advisers to handle vendor due diligence as part of a sale process, they added.

Other private equity firms are expected to show significant interest in a takeover of the business.

According to accounts published on its website, Doncasters made an underlying profit before interest, tax, depreciation and amortisation last year of just under £135m, a rise of nearly 15% on 2012.

It described the results as demonstrating "good progress" and said it expected further growth in 2014 as a consequence of "a continued focus on cost reduction and productivity-led improvements".

The auction of Doncasters, which has been anticipated for several months, will follow the sale earlier this year of Mauser, another of DIC's European investments, to Clayton Dubilier & Rice.

DIC is part of Dubai Holding, one of the groups owned by Sheikh Mohammed bin Rashid al Maktoum.

The Dubai-based group acquired its European portfolio just as the first signs of stress in global financial markets were becoming apparent.

Dubai was forced to default on sovereign debt repayments in 2009 amid a slump in asset prices but has since successfully restructured its borrowings.

The emirate is now recovering from the financial crisis, with significant construction work resuming and international banks increasing staffing levels from the post-crisis trough of recent years.

Doncasters itself undertook a refinancing last year to reduce its borrowing costs.

DIC had contemplated a combined auction of Mauser, Doncasters and Almatis, a German aluminium manufacturer, but opted instead to sell them individually.

Among DIC's other troubled investments was Travelodge, the British hotel operator, which it lost control of after its balance sheet became overstretched.

DIC could not be reached for comment, while Doncasters declined to comment.