Graham Warwick/DALLAS
AVIALL HAS reported a loss of $241 million for 1995, mainly because of a $212 million fourth-quarter charge to cover disposal of its airline engine-overhaul business. The Dallas, Texas-based company has agreed to sell the business to Miami-based Greenwich Air Services for $260-280 million (Flight International, 14-20 February).
Aviall's new president Eric Anderson says that the parts-distribution business and Inventory Locator Service subsidiary, which make up the continuing operations accounted for about $350 million of the company's 1995 revenues, which totalled $870 million.
He says that the Aviall board is committed to growing the distribution and information businesses, which are profitable. Anderson adds that the proceeds from the sale of the engine-overhaul operations will be used to pay down debt, and that continuing businesses "...should be a solid financial picture, with a very strong balance sheet". The company is actively looking for additional product-lines to distribute and is "open to acquisitions", he says.
Aviall decided to sell its engine-overhaul business after results deteriorated rapidly in the fourth quarter, largely because of poor performance on fixed-price contracts. The company came close to defaulting on debt payments, but reached agreement with its banks. "It was a pretty tough financial position," he admits.
Source: Flight International
