Business aviation services provider Ocean Sky has placed its German charter and management subsidiary Triple Alpha into insolvency due to "deeply entrenched operational and financial problems at the business", it says.
The Dusseldorf-based company has been placed under the control of a court-appointed administrator. "These hefty debts predate Ocean Sky’s involvement," says Ocean Sky chief executive Steve Grimes.
The UK headquartered company acquired a 60% stake in Triple Alpha in August 2009. "All other Ocean Sky operations continue to perform well and are unaffected by these developments."
Grimes - who was appointed to the Ocean Sky’ helm in October 2009, adds: "Resolving the inherited problems at Triple Alpha has been one of my principal concerns since taking over as chief executive.
Our initial investment in Triple Alpha was undertaken by the previous management team at Ocean Sky without any due diligence. That management team left the business a few months after the Triple Alpha acquisition was completed.
In 2010, we gave Triple Alpha significant financial support but the challenges were far more acute than Ocean Sky had been led to believe, and it was only when we were finally able to take management control of the business in 2011 that we understood how serious the situation was.
"Having only a 60% stake in Triple Alpha meant that the company’s two founders - who each retained a 20% shareholding - retained responsibility for day-to-day management. In November 2010, Ocean Sky succeeded in increasing its holding in Triple Alpha to 80% by buying out one of the co-founders and appointed a new managing director to lead the attempted rescue of the business.
Grimes says: "We are deeply saddened at Triple Alpha’s insolvency and the effect this will have on employees, customers and suppliers. We have done everything possible to improve the company’s performance, from introducing proper management practices to providing repeated financial support. Ultimately, however, the legacy indebtedness of the company and the financial and contractual matters the company faced proved too great."
Triple Alpha has 60 employees, comprising flight crews and ground-based staff, and sixteen light to mid-size business aircraft under management.