Engineering work on the Loadmaster cargo aircraft has been restarted after Ayres filed for Chapter 11 bankruptcy protection and received interim financing from major creditor GATX.
Albany, Georgia-based Ayres entered Chapter 11 in late November, burdened by debts incurred developing the Loadmaster. GATX Capital has provided an initial infusion of debtor-in-possession (DIP) financing to allow work on the aircraft to resume, says new chief executive Russ Heil.
An interim agreement has been reached allowing Czech manufacturer LET to resume engineering work on the Loadmaster, Heil says. LET, owned by Ayres, was forced into bankruptcy in October. The Czech company will finish designing the aircraft and will plan the flight test programme. Work has been stopped for several months, after Ayres ran out of money.
Ayres, meanwhile, is launching efforts to find new equity investors. "To properly recapitalise the company, we need $80 million to resolve the debts and provide funds to see the Loadmaster into production," Heil says. Key to this is the continued commitment of launch customer FedEx, which has 75 firm orders and 275 options for the Loadmaster. "We [GATX] would not be involved unless FedEx still wanted it," says the ex-Delta Airlines and IPTN executive.
The goal is to fly the Loadmaster in the third quarter of next year and begin deliveries in the "first or second quarter of 2003", Heil says. This is four years behind schedule.
"Ayres took on a programme that was beyond the resources of the company," he says. In return for DIP financing from GATX, owner Fred Ayres has agreed to give up control of the company but will continue in a marketing and sales role, Heil says.
Ayres hopes to emerge from Chapter 11 within six months. The financial restructuring could also involve LET, Heil says, and will require resolution of a lawsuit filed against Ayres by US start-up carrier Pan Pacific Airways over an unfulfilled order for four LETL-420 regional turboprops.
Source: Flight International
