This was announced by the Paramount Group on 22 October 2019 after the manufacturer Aerospace Development Corporation (ADC) had been placed into business rescue in February this year. Adoption of the plan is fully supported by Paramount Aerospace Holdings, a Paramount Group company
According to Paramount Group, the business rescue plan will secure the future of the AHRLAC aircraft and its employees. Importantly manufacturing, sales and marketing of the aircraft to customers around the world are set to resume.
“Paramount Group has already injected new capital in the form of post-commencement funding and will inject significant further capital into the business over the coming months,” Paramount Group said in a statement.
This has the effect of the restart of the factory situated at Wonderboom Airport to the north of Pretoria. All production activities had come to a stop when shareholders of ADC and Paramount Aerospace Holdings, along with directors of ADC applied for business rescue earlier this year, which led to the appointment of Stephan Smyth from PriceWaterhouseCoopers as business rescue practitioner in April.
At the time, he pointed out a breakdown of the relationship between the shareholders, Paramount and the Potgieter family, as well as various deadlocks at board level.
Before business rescue, the ADC Group was run by shareholder representatives who were seemingly not able to reach agreements on their respective roles and obligations. As Smyth found, “the parties were unable to resolve the various disputes, resulting in operational and financial disputes, which resulted in the company being unable to raise working capital, and ultimately a liquidity crisis.”
In its statement Paramount Group committed itself to “building a strong sustainable aircraft and aerospace systems capability in South Africa and this transaction supports this objective.”
The AHRLAC aircraft in flight (image supplied by Paramount Group)
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