ALEXANDER CAMPBELL / LONDON
US private equity firm wants to keep only the 328JET line, while a Russian consortium plans wholesale takeover
Two bona fide bidders have now emerged for the core aircraft businesses of bankrupt airframer Fairchild Dornier. Both lodged bids with administrator Eberhard Braun last week.
US private equity firm Dimeling Schreiber and Park (DS&P) with its partner Avcraft will bid for the 328JETline; while a Russian consortium consisting of the Irkutsk APO aircraft factory and the metals giant Basic Element plans to take over Fairchild Dornier in its entirety.
Under the Russian plan, final assembly and testing of the 728 would stay at Fairchild Dornier's Oberpfaffenhofen plant. However, Russian engineers would also join the programme and some component manufacture would be shifted to Russia. The 728 would fly in mid- to late 2003 and enter service in 2005, assuming Basic Element can provide the engineers, the production capacity, and the estimated $1 billion cost of completing the 728/928 programme.
DS&P's Rick Schrieber explains: "It is our plan to reopen the [328JET] line. Not immediately - there are 20 aircraft just sitting around...but the whole reason is to get it back into production." DS&P has previously invested in NewPiper Aircraft and Rocky Mountain Helicopters. If the DS&P bid is accepted, Fairchild Dornier's other profitable parts - aerostructures and maintenance - would be sold to other bidders, and the 728/928 regional jet programme would finally shut down.
The next step is a creditors' meeting on 5 November, which will discuss the Russian and US bids. Banks and trade creditors will decide which bid to accept. Although a decision is not expected immediately, a Fairchild Dornier source says the process will have to be completed by year-end. Schreiber comments: "No-one is ever really in charge in these messy bankruptcies. It should be over within two to three weeks, but really, who knows?"
Many of the creditors are also risk-sharing partners in the 728/928 programme, giving them an interest in keeping it alive, and they will also be encouraged by the German and Bavarian governments to accept the Russian bid to preserve jobs at Oberpfaffenhofen. But they may be unwilling to transfer their intellectual property in the 728 to Russian companies.
Source: Flight International
