Rolls-Royce on Saturday denied reports suggesting that it is exploring an initial public offering (IPO) for its small modular reactor division.

Sources familiar with the matter indicated that the company is considering raising funds for the division through an IPO and other financing methods, noting that discussions with investment institutions and banks are currently in preliminary stages.

A spokesperson for the division, Rolls-Royce Small Modular Reactor (SMR), stated in an email statement: "Rolls-Royce SMR currently has no plans for an initial public offering and is not in the process of advancing an IPO."

In June, Rolls-Royce's Small Modular Reactor division was selected to construct the UK's first small modular reactors. This forms part of Britain's initiative to accelerate grid decarbonization starting from the mid-2030s. The division, which is majority-owned by the British engineering company, plans to build three reactors.

The UK government has committed £2.5 billion ($3.4 billion) over the next four years for small modular reactor projects, aiming to establish one of Europe's first small nuclear industries.

Countries including the United States, Canada, Romania, and the Czech Republic are also advancing small modular reactor projects. Should the UK's initiative prove successful, it could potentially unlock a substantial global market.