Investment Capital "Pared Down" On Fall Of Russian Stocks

ANN REALTIME REPORTING 10.29.08 1600 EDT: Aero-News has been chasing down numerous News-Spy tips over the past 18 hours, stating Englewood, CO-based AAI Acquisition Inc. -- which purchased the assets of the former Adam Aircraft out of bankruptcy earlier this year -- shut its doors Monday and laid off workers. Calls to AAI headquarters and personnel for information have gone unanswered.

ANN has since confirmed the company is cutting back operations rather severely. While AAI isn't technically out of business, the company has "suspended all flight testing and further development" on the A700 twinjet, according to Robert Olislagers, Executive Director for the Arapahoe County Public Airport Authority at Centennial Airport (APA), home to AAI's headquarters.

"It appears investment capital has been pared down... due to last week's fall of the Russian stock market," said Olislagers, who added he had been unaware of any layoffs at AAI until he visited the company's headquarters himself Tuesday "after I received [ANN's] phone call."

Olislagers said company officials reassured him AAI is "definitely NOT closing its doors," and is still receiving investment capital... though substantially less than originally planned.

Exact figures on the number of layoffs number were not released, though Olislagers said it appears "most" workers at AAI were laid off Monday, though the company did retain "a number of senior engineers."

A formal announcement from AAI is planned later Tuesday, Olislagers added.

As ANN reported, Adam Aircraft filed for Chapter 7 liquidation on February 15. Two months later, the US Bankruptcy Court for the District of Colorado approved the sale of Adam's assets to AAI Acquisition, Inc., a Delaware corporation backed financially by the Russian-controlled Industrial Investors group of companies.

AAI kept relatively quiet about its plans until Oshkosh, when company President and CEO Jack Braly announced AAI planned to continue development of the A700 very-light jet and see it through to certification, expected early in 2010. The company discontinued production of the jet's predecessor, the problematic A500 inline twin-engine piston aircraft.

During the NBAA 2008 convention earlier this month, Braly said AAI employed about 200 people at its facilities at APA -- many of them former Adam Aircraft workers. The company had originally planned to double its workforce by the end of the year... but that was before the bottom fell out of the US stock market, affecting markets and investors around the world.

FMI: www.a700jet.com