Bidding Was Brief; Total Price $26.9 Million
ANN REALTIME UPDATE
11.27.07 1725 EST: So... will it now be Colessna?
Cessnumbia? Rich Belzer, former vice-president of sales for
Columbia Aircraft, sent this update to ANN regarding today's
auction for Bend, OR-based planemaker Columbia Aircraft
Manufacturing, while on the run to catch his flight back home:
After a lengthy hearing regarding whether Park
Electrochemical's initial overbid should (excepting the cash
amount) be considered qualitatively equivalent to Cessna's (it
was), bidding finally began at 11:00 am (PST) and it was all over
by 11:15. After countering Park Electrochemical's initial overbid
of $15 million with a $15.2 million bid, Cessna only needed two
more bids to top Park with a cash bid of $16.4 million, just $2.4
million above their original offer.
Including the $2 million to Garmin and assumption of
liabilities (future warranty claims and deicing installations), the
total Cessna offer (pending an inventory) amounts to $26.9
Closing will take place on December 4, and at that point,
Cessna will take possession of the former Columbia Aircraft
facilities in Bend, Oregon. The Ad Hoc Owner's Committee of
Columbia Aircraft owners attended in force and was highly
enthusiastic with the outcome. Cessna has already announced their
intent to continue building the Columbia 350 and 400 in Bend and is
expected to provide warranty and service support for all Columbia
ANN will provide further updates as they become available.
1645 EST: And then there was one. Park
Electrochemical Corp. has just announced it has discontinued its
participation in the bidding for certain assets and business of
Columbia Aircraft Manufacturing Corporation ("Columbia") in today's
auction conducted in the United States Bankruptcy Court for the
District of Oregon in Portland OR.
Park had submitted an initial bid for portions of Columbia on
November 20, 2007, after conducting due diligence. Park
participated in Tuesday's auction, but chose to discontinue its
participation in the auction bidding process.
"We would like to thank the employees of Columbia Aircraft
Manufacturing for all of their help and assistance relating to our
due diligence efforts," said Brian Shore, Park’s President
and CEO. "We wish the employees the best of luck in the future. In
our opinion, the business will be in good hands with its new owner.
I would also like to take this opportunity to thank Lance Neibauer,
the very talented designer of the Columbia aircraft models, for his
help in connection with our due diligence efforts."
Park's withdrawal effectively leaves just one bidder for
Columbia... Cessna Aircraft Company.
1300 EST: Will
it be Cessna? All indicators point to... probably, at least if the
Columbia Aircraft Owners Ad Hoc Committee has its say during
today's auction for the assets of Columbia Aircraft
On Monday, the owners filed a motion before the US Bankruptcy
Court, stating the deal posed from Cessna Aircraft Company
represents the "best offer" for the planemaker, in the auction now
underway in Bend, OR.
The committee -- comprised of five Columbia aircraft owners who
presently serve on the Board of Directors of the Columbia Aircraft
Pilots Association, also known as "Club Columbia" -- represents the
interests of all current owners of Columbia airplanes.
..."[The committee] hereby provisionally moves this Court to
designate the bid of Cessna Aircraft Company ("Cessna") as the
"best offer" under the terms of the Order Approving Bidding
Procedures, Overbid Protection, Breakup Fee, and Form and Manner of
Notice of Sale (the "Order") (Docket No. 179) even if the Cessna
cash bid is lower than the cash bid offered by Park Electrochemical
Corp. ("Park")," the motion reads. "The Owners Committee seeks this
designation because, as established below, a Cessna acquisition of
the Columbia Aircraft Manufacturing Corporation’s (the
"Debtor") assets will prove far superior to a Park acquisition in
terms of warranty protection and resale support for the more than
500 existing Columbia aircraft owners."
As ANN reported last week,
Cirrus Design -- seen by some as the strongest competition to
Cessna in the bidding for Columbia -- withdrew from the competition
last week, stating the cost of making Columbia a viable addition to
its product line, "will not be cheap." Cirrus also expressed
concerns with the adaptability of its ballistic parachute recovery
system to the existing Columbia airframe -- stating the time and
cost involved was a concern, if in fact the system could be
reverse-engineered at all.
Aerospace entreprenaur Granger Whitelaw, who had told owners he
was interested in maintaining Columbia as a separate, dedicated
manufacturer, also pulled his bid last
week. In his letter to shareholders and creditors,
Whitelaw said he would support either Cirrus or Cessna, so long as
the winning company continued to build Columbia planes -- adding
"if they do not follow up on their commitment, we will be here to
pick up the pieces and rebuild the business as we had originally
ANN will continue to follow this developing story throughout the
day. Stay tuned.