Purchase Comes Five Years After German Company Filed For Insolvency

Chinese aviation conglomerate AVIC how has an aero-diesel engine in its stable. Thielert said in a news release Tuesday that five years after having filed for insolvency, administrator Dr. Bruno M. Kübler sold Thielert's civil business operations to AVIC International, a state-owned Chinese aviation group. Thielert said that because of the restructuring measures implemented during the insolvency period, all locations and jobs are to be maintained.

AVIC International Holding Corporation, majority owned by stated-owned Chinese aviation group AVIC, acquired the assets of Thielert Aircraft Engines GmbH via its newly established company "Technify Motors GmbH". The company will operate under this name going forward. By acquiring Thielert, AVIC furthers its stated strategy of driving general aviation development in China.

With China recently opening up low-altitude airspace for private air traffic, analysts think the local aviation industry is about to boom. AVIC is taking over all of Thielert's production plants including the buildings, as well as all patents and trademark rights. All of the development and production sites in Lichtenstein, Altenburg and Hamburg will be maintained, and all 200 jobs at these sites are to remain intact, according to the agreement.

"Together with AVIC, enormous development opportunities will open up for Thielert - and this will not only be the case in China," Kübler said. "The group has the market position, expertise and necessary financial strength to further expand and substantiate the global market leadership of Thielert kerosene aircraft engines." Other companies in the AVIC Group are Cirrus, an American manufacturer of small aircraft, and the US-based Continental Motors, a manufacturer of conventional gasoline piston aircraft engines. The acquisition of Thielert allows AVIC to also offer kerosene-powered aircraft piston engines in the future. These engines are believed to have substantial growth potential, particularly in the emerging markets and developing countries, as they can be run on kerosene, which is the cheap standard aviation jet fuel and is, unlike leaded aviation gasoline, widely available.

The parties have agreed not to disclose details on the purchase price. Kübler expressed satisfaction that the purchase price adequately reflects the strategic enterprise value and the company's potential.

Thielert Aircraft Engines GmbH had filed for insolvency in April 2008. After stabilizing business operations, Kübler established a structured investor process. However, the process was interrupted by the onset of the global financial crisis, making it difficult to get his asking price for the company.

In the interim, he founded the distribution company Centurion Aircraft Engines AG & Co. KG, which enhanced the engine sales process considerably. Finally, the insolvency administrator initiated the development of a number of new markets, thereby continuously gaining additional licenses and further expanding the global service center and distributor network during the insolvency period.

During the trough of the crisis, unit sales and the investor process regained momentum. "Patience and persistency of all stakeholders, especially the staff members, have been worth the effort," Kübler stressed. "The sale to the strong strategic investor AVIC means Thielert's prospects have brightened significantly again."

FMI: www.thielert.com