UK-based aerospace parts specialist Aero Inventory has sold almost $100 million worth of aircraft parts to Air Canada.
Aero Inventory says in a statement today that it has received "bills of exchange with a face value of approximately $100 million" from Air Canada in exchange for "a significant quantity of consumable aircraft parts".
The bills do not mature until early 2010 but Aero Inventory says it "intends to discount the bills for cash to provide additional liquidity to facilitate new business".
Aero Inventory finance director Hugh Bevan tells ATI the deal with Air Canada will help it achieve its earlier stated objective of reducing its inventory and increasing its cash flow.
As of the end of June 2008, Aero Inventory held stock worth $690 million. Bevan says additional sales could be completed as the company looks to further reduce its stock level while maintaining its existing level of business to customers.
Bevan says the Air Canada deal covers parts which will not have to be moved. The parts are now stored at an Aveos facility and will simply change ownership.
Aero Inventory in November 2007 signed a 10-year contract with Aveos, then known as ACTS, covering the provision of consumable aircraft parts. Aveos uses the parts to maintain aircraft operated by Air Canada and other carriers. ACTS is a former subsidiary of Air Canada parent ACE Holdings.
Bevan says Aero Inventory is seeking to reduce its inventory and increase its cash flow to allow it to invest in new business.
Source: Air Transport Intelligence news
