France's Reims Aviation saved from bankruptcy

AINonline
October 12, 2007, 10:28 AM

Reims Aviation, one of Europe’s few remaining independent light aircraft manufacturers and subcontractors, has been saved from bankruptcy. The Reims, eastern France commercial court lifted the bankruptcy protection order on the company but said it should be broken up and sold in two parts, with 164 of the 461 employees losing their jobs.

Paradoxically, the company was doing well. Despite a healthy order book, Reims Aviation, which last year reported revenues of E42 million ($40 million) went into bankruptcy protection on October 30 following a cash-flow crisis brought about by financial difficulties over its aerostructures contract with Fairchild Dornier, the bankrupt regional jet manufacturer for which it had been building tooling and rigs for the 728/928JET. It also suffered financial penalties caused by late delivery of the F406 Caravan II surveillance aircraft for the Greek Navy. The company was due to have been taken over in its entirety by Wagrapar, but the French financial group failed to receive the necessary bank support and withdrew its offer.

Ventana, an Austrian group, is to take over the company’s aerostructures manufacturing division and maintenance activities for top-of-the-range light aircraft. The renamed Reims Aerospace, which has been undertaking subcontracting for major manufacturing projects for Airbus, Dassault, Eurocopter, Bombardier and Embraer, said it will maintain 257 aviation jobs until at least the end of next year. Ventana founder Ernst Lemberger is to develop the company’s aerostructures design, testing and maintenance activities and aims to increase Reims Aerospace’s revenues by 20 percent to reach “about E30 million [$32.2 million] by 2005.”

Meanwhile, Green Recovery, a French finance house specializing in taking over ailing companies, has purchased the production, marketing and maintenance business of the F406 surveillance aircraft, Reims Aviation’s key product. Powered by two 500-shp Pratt & Whitney Canada PT6A-112s, more than 90 copies of the twin turboprops have been delivered to customers, including French Customs and Britain’s Coast Guards.

The rescue of Reims Aviation will preserve development of the F406 Mark II turboprop, launched in July 2001. Certification is expected this summer. Currently on Reims’ assembly line are three F406s, earmarked for delivery this spring, at the end of this year and next year. The renamed SAS Reims Aviation Industries will employ 40 people.

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