Cessna could face up to five rivals for the acquisition of Columbia Aircraft, despite Columbia's preference for Cessna as a buyer.
The two companies signed a letter of intent in September after the high-performance single-engine piston manufacturer filed for Chapter 11 protection, but on 22 October a US federal bankruptcy judge ordered that other interested buyers, who had complained of favouritism towards Cessna, get the same access to Columbia's records and operations.
If Cessna does not successfully purchase the Oregon manufacturer it would receive no more than $500,000 in a "break-up" fee.
Also interested in Columbia are Cirrus Design and its Atlanta-based portfolio company, Arcapita Versa Capital Management Park Electrochemical and the Malaysian Ministry of Finance, Columbia's majority shareholder.
The Export-Import Bank of Malaysia holds $6 million in claims and $41 million in loan and credit agreements and is among a long list of creditors and aircraft owners worried that they will lose out under the sale. Columbia has listed $60 million in unsecured debt. Creditors will have their first meeting on 31 October and the last day to file a claim is 29 January.
"We hope whoever gets it makes the most of it," says Chris Schweppe of advertising agency Mandala, which is among the top 20 creditors. Scweppe had been a spokesman for Columbia, but says: "They owe us quite a bit of money and haven't been talking to us quite as much." Columbia's attorney declined to comment and company officials have not been available to comment.
If Cirrus has the winning bid at auction, chief executive Alan Klapmeier says: "We would continue to produce that airplane where it's produced right now. Purchasing Columbia is about trying to give customers alternatives rather than fill any strategic niche."
More than 400 Columbia employees are in Bend, Oregon, where they generated $90 million in gross revenues in 2006, and Cessna has promised to keep them there.
Pre-petition lenders gave $3 million the day Columbia declared bankruptcy to keep the facility running. Cessna's letter of intent filed on 21 September offers to assume $11 million of Columbia's debt and pay $14 million cash. Cessna officials made no comment on the court's adjustment on 22 October of the acquisition procedures.
Source: Flight International