Eclipse Reaches Out To Owners For Additional Funding | Aero-News Network
Aero-News Network
RSS icon RSS feed
podcast icon MP3 podcast
Subscribe Aero-News e-mail Newsletter Subscribe

Airborne Unlimited -- Most Recent Daily Episodes

Episode Date



Airborne-Wednesday Airborne-Thursday


Airborne On YouTube






Don't Miss: Sun 'n Fun Digital Daily at, The LIVE SnF Innovation Preview at 1030ET, 3/28 at, and The LIVE Morning Brief at 0900 each day thereafter... 

Tue, Nov 27, 2007

Eclipse Reaches Out To Owners For Additional Funding

Offers Chance For Customers To Lock In Current Prices

ANN REALTIME REPORTING 11.27.07 1545 EST: In a candid discussion Tuesday with ANN's Rob Finfrock, Eclipse Aviation CEO Vern Raburn admitted production delays have conspired to complicate the Albuquerque, NM-based planemaker's financial outlook -- "and feed the rumor mill" claiming the company's imminent demise -- but Raburn makes no bones about how he views his company's long-term success.

"This company has a pretty [gosh-darned -- you can figure out what he really said -- Ed.] good record of pulling success out of adversity," Raburn said.

Raburn doesn't shy away from reports of adversity. With production rates still hovering below one aircraft per day, deliveries aren't up to where Eclipse has said they need to be to prove profitable... which means money isn't coming through the door at the rate Eclipse expected. So, the company is reaching out for additional capital... but in addition to looking for new financing from investors, the company is also appealing to Eclipse position holders with a program that could prove quite lucrative.

On Tuesday, Eclipse announced a program giving current position holders an opportunity to fix the standard aircraft price of their Eclipse 500 aircraft at $1,250,000 USD, without any future price adjustments, if they agree to pay a 50 percent payment of $625,000 by December 14. That amount -- which is in addition to any previous deposits -- will be held in an escrow account until Eclipse has received at least $30M USD from customers accepting the offer.

"This is a chance for customers to save a substantial amount on the purchase of their Eclipse 500 aircraft. By fixing the price at $1,250,000 USD, they are protected from changes in price due to increases in CPI-W or from other factors," Raburn said.

Raburn notes the customer program represents but a small portion of the funding Eclipse is seeking -- and that amount, in turn, "is relatively small as a percentage of the total capital we have raised to date.

"We have been successful in the past in our ability to raise capital and believe we will be able to close this financing within 120 days," Raburn wrote to customers. "In the meantime, we are looking to raise funds now so that we can complete our financing in an orderly fashion.

"Eclipse has made it a priority to give something back when we were forced to make a change or didn't perform as we planned," Raburn says. "Here are a few examples. In 2003, after Williams International failed, we were forced to raise the aircraft price, but raised yours much less than the market price. We also made your positions fully transferable, which allowed you to realize the increased value of your position based on customer demand and price increases.

"In 2005, when we increased the price of the Eclipse 500, we offered certain position holders whose deposits were in escrow, the opportunity to release their money from escrow, and save more than $30,000," he continues. "In early 2007, when our delivery schedule slipped, we offered affected customers an interest payment for every month we were delayed delivering their aircraft.

"We clearly stumbled through the summer," Raburn told ANN. "But unlike some others, we have this propensity to step up and say "oops, we screwed up."

Raburn acknowledges the deposit program, while intended as an incentive for current position holders, also represents additional risk for those customers should Eclipse fail to deliver their aircraft... but Raburn flatly places the chances of Eclipse's long-term survival "somewhere in the 100 percent range."

"This is a rational method of raising capital -- and a real chance for our customers to really save money," Raburn states. "Consider this -- if you purchased an Eclipse 500 for $1,295,000 USD with a delivery date in 2008, you would save approximately $360,000 USD -- more than half of the $625,000 USD deposit. If you purchased an Eclipse 500 for $1,595,000 USD with a delivery date in 2010 you would save over a half-million dollars!"

Avio NG And FIKI Progress

Raburn also updated ANN on the status of certification of the Avio NG avionics suite. "As of today, we are 82% complete with all certification testing," Raburn says. "This means that certification is now expected within 30 days. Production incorporation of Avio NG is occurring as planned, with the first Avio NG equipped customer aircraft assemblies now rolling down the line." (ANN plans to visit Eclipse within the next 7-10 days, to witness S/N 105 -- the first NG-equipped bird -- coming down the line -- Ed.)

Avio NG development has also impacted the company's plans for foreign certification -- specifically, EASA. Eclipse says its EASA certification program is "well underway," with certification activities with Avio NG ramping up in early 2008 and expected completion early in the second quarter.

Raburn also says Eclipse has completed "all high-risk development flight testing" for flight into known icing (FIKI) certification, "using artificial shapes on the airfoils to simulate flight into known icing conditions and we will begin natural ice testing next week." The company adds ice shape testing is planned in January with natural ice testing occurring in February.

"The new de-icing boot required for flight into known icing conditions has been qualified and is now being installed on all production aircraft," Eclipse adds.

In summary, Raburn readily admits Eclipse isn't at the point he expected it to be... but says the company has been a success nonetheless.

"We are proud to have already built more jet aircraft at a faster rate than any other general aviation manufacturer in history," Raburn notes," and we've delivered more jets in our first year than any other existing company."



More News

ANN's Daily Aero-Term (03.27.23): Temporary Flight Restriction (TFR)

Temporary Flight Restriction (TFR) A TFR is a regulatory action issued by the FAA via the U.S. NOTAM System, under the authority of United States Code, Title 49. TFRs are issued wi>[...]

Aero-News: Quote of the Day (03.27.23)

“In 2021, we laid the foundation for a stronger, more resilient, and predictable Bombardier by 2025. Halfway down the road, we can say we are delivering on that promise. All >[...]

ANN's Daily Aero-Term (03.28.23): Ground Based Augmentation System (GBAS)

Ground Based Augmentation System (GBAS) A ground based GNSS station which provides local differential corrections, integrity parameters and approach data via VHF data broadcast to >[...]

ANN's Daily Aero-Linx (03.28.23)

Aero Linx: The Taylorcraft Foundation The Taylorcraft Foundation is exclusively organized for charitable, educational & scientific activities and will preserve the history and >[...]

Aero-News: Quote of the Day (03.28.23)

“We are so convinced of the good prospects that the pilot training at the European Flight Academy provides that we bring our Take-off-Promise to market. Not only does it prov>[...]

blog comments powered by Disqus





© 2007 - 2023 Web Development & Design by Pauli Systems, LC