LONDON: Rolls-Royce said it agreed to sell its Spanish unit ITP Aero to a consortium led by Bain Capital Private Equity for 1.7 billion euros ($2.0 billion), bringing the British engineering company close to its 2 billion pound target for disposals.

The sale sent Rolls-Royce shares up 10% to 146 pence, reaching their highest level since the early weeks of the pandemic in March 2020.

The 2 billion pound disposal plan was announced in August 2020, aimed at repairing a balance sheet rocked by pandemic debts. ITP was the biggest asset on the block.

Rolls-Royce's board had approved the deal, which the company said was subject to regulatory clearances.

"Today's announcement is a significant milestone for our disposal programme as we work to strengthen our balance sheet, in support of our medium-term ambition to return to an investment grade credit profile," Rolls-Royce's chief executive Warren East said in a statement.

Turbine blade-maker ITP will remain a supplier to Rolls-Royce after its sale.

Bain Capital's consortium includes Spanish co-investors SAPA and JB Capital, with the potential for further industrial partners to join, the statement said.