Adam Aircraft Suspends operations
02-11-2008, 04:24 PM
#1
Che Guevara
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Joined APC: Aug 2005
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Adam Aircraft Suspends operations
ADAM AIRCRAFT SUSPENDS OPERATIONS
Adam Aircraft has suspended operations at its Colorado facilities. In a short news release, the company said the action was taken "due to the inability of the company to come to terms with their lender for funding necessary to maintain business operations." The news release doesn't identify the lender, but previous rounds of financing, totalling almost $300 million, have included such major investment houses as Goldman, Sachs and Co. and Hunt Growth Capital as participants.
In January, Adam announced that it needed $30.5 million in interim financing to allow its current financial partner, Citibank, the time to find the $75 million to $150 million it needed to get into production and start selling against a backlog of orders the company estimated to be worth $1 billion, according to some reports. In a letter to shareholders leaked to the media in late January, CEO John Wolf said that if the company didn't have the $30.5 million by the end of January, the company was likely doomed. Monday's announcement seems to echo that sentiment while leaving the door for a miracle open a crack. "The company is currently exploring all of its alternatives and will provide further guidance when decisions are made, which is expected to be later this week," the release said.
As little as a week ago, company officials were claiming that the search for funding was continuing and that production of the fifth A700 jet was under way. The jet has not achieved FAA certification but the A700 push/pull piston twin has. Adam has reportedly sold 17 of the piston aircraft and delivered seven. Meanwhile, the city of Pueblo, Colo. didn't wait for Monday's announcement to demand $2 million in incentives it says should be returned. The city says Adam promised to create 448 jobs and actually created about 90, most of which disappeared in a round of layoffs and plant consolidations in January. The city of Pueblo has placed liens against Adam's equipment in the city-owned buildings that were part of the incentive package.
Adam Aircraft has suspended operations at its Colorado facilities. In a short news release, the company said the action was taken "due to the inability of the company to come to terms with their lender for funding necessary to maintain business operations." The news release doesn't identify the lender, but previous rounds of financing, totalling almost $300 million, have included such major investment houses as Goldman, Sachs and Co. and Hunt Growth Capital as participants.
In January, Adam announced that it needed $30.5 million in interim financing to allow its current financial partner, Citibank, the time to find the $75 million to $150 million it needed to get into production and start selling against a backlog of orders the company estimated to be worth $1 billion, according to some reports. In a letter to shareholders leaked to the media in late January, CEO John Wolf said that if the company didn't have the $30.5 million by the end of January, the company was likely doomed. Monday's announcement seems to echo that sentiment while leaving the door for a miracle open a crack. "The company is currently exploring all of its alternatives and will provide further guidance when decisions are made, which is expected to be later this week," the release said.
As little as a week ago, company officials were claiming that the search for funding was continuing and that production of the fifth A700 jet was under way. The jet has not achieved FAA certification but the A700 push/pull piston twin has. Adam has reportedly sold 17 of the piston aircraft and delivered seven. Meanwhile, the city of Pueblo, Colo. didn't wait for Monday's announcement to demand $2 million in incentives it says should be returned. The city says Adam promised to create 448 jobs and actually created about 90, most of which disappeared in a round of layoffs and plant consolidations in January. The city of Pueblo has placed liens against Adam's equipment in the city-owned buildings that were part of the incentive package.
03-21-2008, 04:30 PM
#2
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Goodbye Adam Aircraft
I wonder about all this. They had a good aircraft, certified and sold, and were well on the way to having a second. Did they create the company merely to swindle investors from the getgo? Nah, I doubt it. Did they get left high and dry on the heels of Citibank's financial troubles? Yes I think so; but I am not sure.
Late in 2007 Citibank could not pay its bills because of defaulted student loan repayments. I happen to be one of their loan holders and I pay on time, but if Citibank could not help Adam due to defaulting accounts then Adam Aircraft could not keep its ship sailing long enough to tap the impressive sales revenues it claimed to already have on the books, and its collapse was an inevitable outcome. Or maybe it is just a sign of the times now with economic downturn being the order of the day. If so, then Adam was an early casualty and an indicator of what was to come in the months ahead.
I watched Adam build its business during years I was in college and I applied there for work as well as knew students who interned at their Colorado facility. I saw slides showing test rigs and pictures of the Adam facilities making airplanes during happier times. It's really too bad they folded... they did not deserve what they got. Sometimes fate is beyond anyone's control; who can decide what will happen to any of us and for whom the bell will toll.
So Adam Aircraft should be remembered for who they were, an innovative upstart with a bright future and an impressive product. Whom among us would fail to desire such a descriptor at some point along the way. Firms will be started and some will be deserving, but not all will survive and the ones that are lost should always be remembered.
-Cub
Late in 2007 Citibank could not pay its bills because of defaulted student loan repayments. I happen to be one of their loan holders and I pay on time, but if Citibank could not help Adam due to defaulting accounts then Adam Aircraft could not keep its ship sailing long enough to tap the impressive sales revenues it claimed to already have on the books, and its collapse was an inevitable outcome. Or maybe it is just a sign of the times now with economic downturn being the order of the day. If so, then Adam was an early casualty and an indicator of what was to come in the months ahead.
I watched Adam build its business during years I was in college and I applied there for work as well as knew students who interned at their Colorado facility. I saw slides showing test rigs and pictures of the Adam facilities making airplanes during happier times. It's really too bad they folded... they did not deserve what they got. Sometimes fate is beyond anyone's control; who can decide what will happen to any of us and for whom the bell will toll.
So Adam Aircraft should be remembered for who they were, an innovative upstart with a bright future and an impressive product. Whom among us would fail to desire such a descriptor at some point along the way. Firms will be started and some will be deserving, but not all will survive and the ones that are lost should always be remembered.
-Cub
Last edited by Cubdriver; 03-21-2008 at 04:56 PM.
03-22-2008, 02:34 PM
#6
Gets Weekends Off
Joined APC: Oct 2006
Position: CL65 Captain
Posts: 484
03-24-2008, 04:40 AM
#7
Flying Farmer
Joined APC: Jul 2006
Position: Turbo-props' and John Deere's
Posts: 3,160
Honestly the best Private/Instrument rated pilots I've flown with are our TBM owners, the types that would be the most likely to "move up" to something of the VLJ manner. I'm still betting 99% are flown with a qualified pro in the right/left seat anyways.
04-14-2008, 06:45 PM
#8
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Adam Aircraft Sold
Looks like there may be a future for them after all. Too good a company to die, and Miami Vice needs Adam airplanes for their movies...
Flying eNewsletter (April '08)
ADAM AIRCRAFT SOLD: COULD OPEN DOORS NEXT WEEK
After investing hundreds of millions to develop its A500 and A700, Adam Aircraft has been sold for $10 million to AAI Acquisition Inc, said to be backed by Russian private equity firm Industrial Investors. According to The Denver Post, the Adam plant at Centennial Airport outside Denver could reopen as early as next week. Adam, which certified its piston twin A500 and was working toward certification of its A700 twinjet, declared Chapter 7 bankruptcy earlier this year. Trustee Jeffrey Weinmann told the newspaper, "This is good for the city; it's good for Colorado; it's good for the bankruptcy estate to sell it whole rather than piecemeal."
ADAM AIRCRAFT SOLD: COULD OPEN DOORS NEXT WEEK
After investing hundreds of millions to develop its A500 and A700, Adam Aircraft has been sold for $10 million to AAI Acquisition Inc, said to be backed by Russian private equity firm Industrial Investors. According to The Denver Post, the Adam plant at Centennial Airport outside Denver could reopen as early as next week. Adam, which certified its piston twin A500 and was working toward certification of its A700 twinjet, declared Chapter 7 bankruptcy earlier this year. Trustee Jeffrey Weinmann told the newspaper, "This is good for the city; it's good for Colorado; it's good for the bankruptcy estate to sell it whole rather than piecemeal."
Last edited by Cubdriver; 04-15-2008 at 02:37 AM.
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