Kaman is to write off its investment in contracts to supply aerostructures to struggling MD Helicopters (MDHI). The Connecticut-based company will take a charge of $21 million in the third quarter, but intends to "maintain a business relationship with MDHI should it be successful in improving its financial and operational situation", according to chief executive Paul Kuhn.
Kaman has contracts to provide fuselages for MD 500 and MD 600 series helicopters and composite rotor blades for the MD Explorer, but stopped production in the second quarter of last year because of payment issues. It received $4.4 million from MDHI in 2003, but this year had received only nominal payments by the end of June, by which time its programme costs exceeded $20 million.
Mesa, Arizona-based MDHI, owned by Netherlands holding company RDM, has been striving to arrange new financing. "We do not expect anything until the end of October," says chief executive Henk Schaeken.
The company's cashflow problems arose from development and certification issues that delayed deliveries under two major contracts for Explorer helicopters.
Source: Flight International
