Clayton, Dubilier & Rice (CD&R) and Allianz Capital Partners have completed their purchase of Fairchild Aerospace, taking an 80% stake, and are offering the remaining 20% to the founding Dornier family and senior management.

The agreement gives CD&R a controlling 60% stake and Allianz another 20%, in return for an immediate $300 million cash injection and the promise of $100 million more when needed. Five Dornier family members are being offered up to 15% and the management up to 5%.

"They will determine their percentage and have a window in which to make that decision," says Charles Pieper, Fairchild's new chairman and chief executive. "But in no instance will it be more than 20% and it may be as low as 5%."

Fairchild has invited more than 50 senior staff to invest directly in the company and plans to offer other employees stock options. Former owner and chairman Carl Albert retains a small stake and a seat on the board.

The deal clears the way for another $800 million to be made available in bank loans and debt financing. Fairchild claims this will allow it to deliver the 44-seat 428JET by 2002, the all new 70-seat 728JET by November 2002 and stretched 928JET by 2005, while completing a further undecided development.

Pieper blames the six-month slippage in delivery of the first seven 728JETs on the uncertainty that surrounded Fairchild during its search for new backers, although the eighth aircraft is on schedule. "Clearly this has had an effect," he says.

Pieper is confident that European and US airline customers can be found for the launch of the 928JET this year and claims to be in talks with "several very interested customers". Attention then turns to a 50-seat 528JET for regional carriers or a stretched 120-seat 1128JET, with "two years in which to decide" between them.

Source: Flight International