Graham Warwick/ATLANTA

GULFSTREAM Aerospace is to go public with an initial share offer which values the US business-jet manufacturer at around $2.2 billion. Owner Forstmann Little, a private New York investment firm, has filed to sell about one-third of Gulfstream in an initial public offering (IPO) which is hoped to raise around $650 million.

The Savannah, Georgia-based manufacturer shipped 26 GIVs valued at $660 million in 1995 and is projecting that deliveries will surge by almost 60% in 1997, when both aircraft are in production. The company's backlog of orders and letters of intent exceeds $3 billion, and includes 63 firm orders for the GV.

Forstmann Little and Gulfstream founder Allen Paulson acquired the company from Chrysler in 1990, for around $850 million. An April 1992 IPO to raise some $100 million to retire debt by selling a 17% stake in the manufacturer was called off because the stock price would have been too low.

Instead, in September 1992, Forstmann Little repurchased Paulson's 31% stake and invested a further $250 million in the company, which immediately launched development of the long-range Gulfstream V. The refinancing reduced Gulfstream's interest payments and allowed the company to fund development of the GV out of sales of the existing GIV.

US certification and first deliveries of the GV are scheduled for the fourth quarter of 1996. Gulfstream with then be a two-product company for the first time in its history.

Proceeds from the IPO will go to Forstmann Little, Gulfstream executives and to retire debt. Gulfstream chairman Teddy Forstmann appointed a totally new management team in 1994-5, giving senior executives a stake in the company. These include vice chairman, Bryan Moss, who joined Gulfstream from arch-rival Bombardier. Gulfstream has a 12-18-month lead,over the Bombardier Global Express long-range business jet, which is scheduled to be flown, for the first time in September. Certification has been scheduled for May 1998. The Canadian manufacturer has acknowledged having orders for more than 40 Global Expresses.

Source: Flight International