Andrew Doyle/MUNICH Graham Warwick/WASHINGTON DC
Let Kunovice's largest creditor is to decide this week whether to file a bankruptcy petition against the cash-strapped Czech aircraft manufacturer, which has been forced to cease production due to financial problems.
The Ayres-owned company owes the Konsolidacni Banka (KoB) around 2 billion Czech crowns ($50 million), and cannot meet interest payments. One saviour might be BAE Systems, which could place offset work with Let as part of its campaign to sell Saab Gripens to the Czech air force.
KoB demanded that adequate financing be secured by 4 September if Let was to continue as a going concern, and insisted that Ayres install a new board at Let's 31 August annual general meeting - a meeting Ayres cancelled, KoB says, claiming there were "no new candidates" for the board.
"If the two conditions are not fulfilled and the company is not put back on track, more than likely the bank will be forced to take serious measures, one of which could be filing a petition for bankruptcy," KoB warns. "Ayres has not succeeded in stabilising the company nor in securing financing."
Ayres admits it "quit putting money into Let" in July, when KoB cancelled a standstill agreement on debt repayment, and is "not clear what will happen". The US company plans to build its Loadmaster at Let, but production of the cargo aircraft is a year away, while sales of Let's L-410 commuter aircraft cannot support the factory.
"Let cannot exist on sales of the 410. Loadmaster is essential for Let to survive," says chairman Fred Ayres, who is prepared to transfer production to Poland or Romania.
BAEis negotiating with KoB on Ayres' behalf, but rules out financial involvement. "We're working with the other parties to see if there is a way of finding a solution," it says. An offset deal for Gripen could provide a way out, and KoB says it "considers BAE a suitable partner" and is negotiating "on its participation".
Ayres says Israel Aircraft Industries (IAI) is interested in Loadmaster work, and hence Let, "but not Let by itself". KoB met with IAI last month. Ayres plans to meet with IAI again this week.
Source: Flight International
