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Eclipse clamps VLJ price to raise capital

In an effort to raise short-term capital, Eclipse Aviation is offering position-holding customers a $1.25 million inflation-free purchase price tag, before options, for its Eclipse 500 very light jet in return for a $625,000 non-returnable deposit by 14 December. Customers who have already paid half the price of the aircraft, due six months before delivery, are not included.

Eclipse chief executive Vern Raburn says the idea "emerged from customers" as a way to help bridge a funding gap caused by not meeting production targets. The company has certificated 85 aircraft to date and plans to end the year with more than 100 aircraft delivered, far short of the 500 it had projected for 2007 this time last year.

Raburn says other cash-raising initiatives are also under way to keep the company running until a new financing arrangement is in place within three months.

Eclipse says it will put the deposits in an escrow account that will only be accessed when the cumulative amount exceeds $30 million, representing 48 aircraft. The twinjet sold for $1.6 million in June 2006 prices, meaning a buyer who had put a deposit on a 2010 delivery could save $500,000 under the plan.

Raburn has not said how many aircraft he intends to sell at the discounted price, but believes the lost revenue will not be significant because it will be "diluted" by the total number of aircraft the company plans to sell. "It's a rational financial transaction," he says.

The information came as part of a 27 November letter to owners that included a status report on the programme. Raburn says the AvioNG integrated avionics suite is "82% complete" and will be certificated before year's end, flight-into-known icing certification should be completed in February, two new service centres will open in early 2008, bringing the total to four, and two full-motion simulators will available by the end of January. At present the company has two fixed-based flight training devices for training.




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