As Flight International closed for press, Fairchild Dornier appeared on the verge of filing for bankruptcy protection in the German courts. Although the manufacturer described reports of a possible impending filing as speculative, industry sources suggest it could come as early as 2 April, after the breakdown of negotiations with prospective strategic investor Boeing.
Bankruptcy protection could result in Fairchild Dornier's product lines or entire divisions being sold or spun off as separate businesses.
In return for granting protection from creditors, the court would appoint an administrator in place of the supervisory board, which would try to restructure the company to ensure its long-term survival. If protection is sought, the current management team is expected to remain in place to ensure the continued day-to-day running of the firm, and will report to the administrator until a new buyer can be found.
Senior sources within Fairchild Dornier hope talks might resume with Boeing once the firm is in administration. Sources suggest the company had pinned its hopes on Boeing, not just as a badly needed new investor, but as a strategic partner in marketing, selling and supporting Fairchild Dornier's 328 and new 728/928 family of regional jets. The manufacturer is in talks with other potential partners, but sources suggest serious suitors will only emerge once it is in administration.
Other firms are believed to be interested in parts of the company, such as regional jet rival Bombardier and Airbus majority owner EADS. The latter is seen as a possible buyer of Fairchild Dornier's Airbus structural subcontracting business, which Boeing has ignored. Or it may be separated into a standalone business, along with other parts of the company such as the San Antonio-based support operation.
Fairchild Dornier's present shareholders, Clayton, Dubilier & Rice and Allianz Partners, have offered to inject more money into the company - $870 million including bank loans - but only if the firm finds a new strategic investor.
Source: Flight International
