Former VLM parent Panta rides to aid CRJ supplier Avcorp

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Dutch investment firm Panta Holdings potentially stands to take over Canadian aerostructures company Avcorp, which has been struggling to overcome a rapid fall in demand from its customers.

Vancouver-based Avcorp's products include horizontal and vertical stabilisers for the Bombardier CRJ regional jet programme, up to the CRJ1000.

While the manufacturer is optimistic over its long-term prospects, it has been facing an immediate need for cash to sustain itself as the economic downturn has bitten.

Panta Holdings, the investment firm which formerly owned Belgium's VLM Airlines, stepped in last month but an attempt to arrange a financial support package failed to satisfy regulators.

But Panta has agreed an alternative deal under which it will acquire 33% of Avcorp, through a share placement, for proceeds of C$2.4 million ($2.2 million).

Avcorp is also to undertake a rights issue through which shareholders can subscribe for 2.5 additional shares.

Panta, which will already have rights to buy a block of these shares, has also agreed to purchase any shares not otherwise assigned - which, if Panta is the sole participant, could give the investment firm 81.8% of Avcorp's stock.