JUSTIN WASTNAGE / LONDON
Farnborough Aircraft expected to enter administration as major shareholder moves to save ailing manufacturer
A major shareholder of Farnborough Aircraft is expected to submit a rescue bid in late May to allow continued development of the UK company's F1 five-seat, single-engined turboprop following the its financial difficulties.
Farnborough Aircraft was expected to seek protection from creditors and enter administration late last week, after which contact lens magnate Geoffrey Galley plans to submit a rescue proposal. Galley, who owns 20% of the company, has created Farnborough Aircraft Corporation to buy the original company's assets.
The F1 programme, founded by land speed record holder Richard Noble, had been mainly funded through private donations, averaging £4,000 ($5,840), which were transferred into "stakes" in the project. The new company is thought to favour a more orthodox funding path, and estimates that $100 million will be needed to get the aircraft to certification.
Many of the 400 smaller stakeholders, however, are believed to be against the new management - not least since Galley's share could rise to 95%, diminishing the value of their stakes.
Flight International has seen a copy of a letter from an anonymous source sent to all shareholders warning that Galley intends to buy the design rights to the F1 and sell them on to a general aviation manufacturer.
Richard Blain, company secretary of Galley's proposed company, denies that the design rights will be sold and says that production will still go ahead, adding that transferring control to Galley would speed up the certification process. The project has been repeatedly delayed, most recently last September when a design review was postponed due to a lack of investment (Flight International, 18-24 September, 2001). Blain says the project would be lost entirely if the administrator rejects Galley's offer.
Noble had negotiated goodwill and risk-sharing deals with several suppliers. It is unclear whether these agreements, which include three PT6A turboprop engines from Pratt & Whitney Canada, will be honoured.
Farnborough Aircraft has taken two $12,000 refundable deposits to date for the $2 million aircraft, but forecast a global market for 10,000 aircraft to act as air-taxis.
Source: Flight International