Kellstrom Industries has filed for Chapter 11 bankruptcy protection, but will survive through a takeover by US investment firm Inverness Management. Kellstrom, which purchases, overhauls, resells and leases aircraft and engine parts, has been struggling for some time.
The Florida-based company has slashed its workforce and tried to secure permanent financing to see it through the industry downturn.
Under the agreement, Inverness entity KIAC will acquire Kellstrom's ongoing business, as well as some of its inventory, for $50 million in cash. Another $46 million is set to be raised over the next five years as privately held Inverness sells some of Kellstrom's inventory.
Kellstrom's senior lenders have agreed to extend a $10 million credit facility which should allow the company to survive until the deal is completed.
Kellstrom acquired Lockheed Martin C-130 aftermarket support specialist Certified Aircraft Parts in 1999, and the aircraft and engine parts resale business of financially struggling maintenance company Aviation Sales in 2000
Source: Flight International
