New York firm takes controlling interest and provides much-needed capital for light rotorcraft manufacturer
MD Helicopters (MDHI) is hoping to rebuild customer confidence after being rescued by New York financial firm Patriarch Partners, which has purchased a controlling interest in the light helicopter manufacturer from Netherlands-based RDM. MDHI says it now has adequate working capital to continue production, fulfil existing orders and improve customer support.
Suppliers including Kaman, which manufactured fuselages for the MD 500/600 and rotor systems for the MD 900, had stopped work after MDHI failed to make payments, and operators have complained of a critical lack of spares. Now the Mesa, Arizona-based manufacturer says it has “ignited its supply chain and production line” following the restructuring, with a backlog of 17 helicopters.
“This recapitalisation assures our customers that MD Helicopters will have sufficient working capital to be a strong, viable company fully able to support its products and its customers,” says chief executive Henk Schaeken. The immediate goal, he says, is to restore customer and supplier confidence in MDHI’s long-term viability. RDM, which acquired the former McDonnell Douglas light helicopter product line from Boeing in 1999, retains a minority stake.
MDHI’s financial difficulties were largely caused by delays in delivering heavily equipped MD Explorer light turbine twins to German and Dutch police forces. Delays in certificating a higher gross weight for the Dutch Explorers led to the eight-aircraft contract being cancelled in March.
Meanwhile, Kaman’s board has voted to outbid an outside investor to buy control of the company from its founding family. Under the company’s two-tier stock structure, the Kaman family owns only 3% of the shares, but holds all the voting rights. The board agreed to increase its offer to $62-68 per share after New York investment firm Mason Capital offered $55 a share.
Kaman reported net income of $2.8 million for the second quarter, on sales up 9.6% to $535 million, compared with a net loss of $500,000 for the same period last year. The company’s aerospace sector, which includes aerostructures, helicopters and distribution subsidiary Kamatics, turned in operating income of $9.5 million, compared with a $3.6 million loss a year earlier.
GRAHAM WARWICK/WASHINGTON DC
Source: Flight International
