Shares Fall On Word Big Selloff Looming

Shares in German aircraft engine manufacturer Thielert AG fell to their lowest levels in three years, after news surfaced the company planned to sell off shares to raise funding and oust CEO Frank Thielert.

Bloomberg News reports Thielert said Friday the diesel engine manufacturer "is threatened by an urgent liquidity crisis, which was triggered by investments already made and delays with the series delivery of airplane engines to airplane manufacturers." The company aims to raise some 24.4 million euros ($38.5 million US) by selling shares.

Though demand for its powerplants has increased steadily in the past two years -- with aircraft makers such as Diamond and Cessna offering factory-spec new aircraft equipped with Thielert diesels -- the company has a decidedly rocky financial history. Thielert has delayed releasing its 2007 earnings report until the end of April, citing the need to reexamine results from previous years. That decision came after a German court tossed out Thielert earnings statements from 2003 through 2005, due to valuation discrepancies.

BHF Bank analyst Jochen Klusmann said news of Thielert's need for cash should come as surprise to no one in the industry. "Anyone who was surprised has been sleeping for the past weeks," said Klusmann. "The bottom line is the company has booked relatively high sales and profit, but never has had good cash flow."

The company's board also requested the removal of Frank Thielert as CEO, as well as the ousting of Chief Financial Officer Roswitha Grosser. Thielert will continue to serve as chief operating officer once a new CEO is appointed, according to reports.

For the short term, Thielert shareholders have granted an emergency 2.65 million euro loan, due for repayment in two years. Outside banks have extended the company another 5.5 million euros in new credit lines.

FMI: www.thielert.com