Continues Search For Javelin Funding, But Development On Hold

Aviation Technology Group gave walking papers to 40 of its 50 workers at Denver's Centennial Airport on Monday, as the company struggles to obtain funding to continue development of the Javelin very-light jet.

"We told them that because of the issues with our funding, we had no other choice than to let them go at this point in time, that we had meetings with our partners this week and will see how we can continue," Board member Horst Bergmann told The Denver Post.

As ANN reported, last month ATG gave its employees a mandatory week-off following the Thanksgiving holiday, as the company worked with Citigroup to secure additional funding. The company hired the investment bank this year to search for roughly $200 million in new funding, but so far has proven unsuccessful.

That puts ATG and its partner, Israel Aerospace Industries, in a serious bind. The company has over 100 orders for the two-seat Javelin 100, and has collected $25,000 deposits on those orders. Bergmann said ATG is keeping those orders on books, "until we know which way we are going to go."

IAI also planned to develop a military-spec version of the tandem-seat Javelin -- which resembles a 3/5-scale fighter jet -- for sale to foreign markets as a trainer or light attack aircraft. ATG plans to meet with IAI this week, in hopes of securing more money.

Bergmann said ATG told the laid off workers if they find another job, "they should really try to grab it, and we are going to help them in doing that."

"I cannot really say how the meetings will go this week — that's the difficulty," Bergmann said. "It was not a good day for ATG, especially, you know, the time of year, but we have been trying very, very hard. We had no other choice to do what we had to do because it was more and more difficult now to have 50 employees."

For the moment, ATG "is still operating, but that may change one way or the other this week or this month," he added.

In an official statement to ANN Tuesday evening, ATG said it has stopped development work on the Javelin, pending additional money... adding quick action on more funding is "unlikely."

"ATG, with the help from a Wall Street banking institution, has been seeking funding to continue its Javelin high performance business jet and military trainer for the past 12 months," the company said. "Due to circumstances beyond ATG's control, it is unlikely that adequate funding can be secured in a timely manner. 

"ATG has therefore decided to halt development of the Javelin at this time. Further action will be decided upon after proper communication with our strategic business partner."

FMI: www.avtechgroup.com