Company Says Letters Sent To Over 50 Interested Parties

Confirming what many in the industry saw as an inevitable certainty, on July 1 the Chemnitz Local Court in Germany opened formal insolvency proceedings against Thielert Aircraft Engines GmbH. Bruno M. Kuebler, who has already served as the preliminary insolvency administrator, was appointed as Thielert's insolvency administrator.

Kuebler stressed the company's business operations will continue unchanged despite opening of the insolvency proceedings. "The transition from preliminary to opened insolvency proceedings is a purely formal act that has no noticeable effects on the company’s relations with its suppliers or customers," according to a company release.

The commencement of formal insolvency proceedings -- roughly equivalent to Chapter 7 liquidation in the US -- also marked the official start of finding an investor for the company. "An investor who is capable of securing the existence of the company on a long-term basis at its business locations and continues to develop the company’s leading position on the market for diesel piston engines should get the nod," said Kuebler. "Of course, the purchase price also plays a role."

Speaking of the purchase price, that figure is the sticking point for one potential investor. As ANN reported last month, Diamond Aircraft -- Thielert's largest single customer -- proposed a consortium with Cessna, Piper, and outside investors to take over the troubled enginemaker, targeting an approximately $79 million purchase price.

While an official target price has not been publicly disclosed by Thielert, or Kuebler, there have been reports of an approximately $158 million pricetag for TAE. To date, says Thielert, Kuebler has written to over 50 prospective buyers, giving a brief outline of the company's assets. Those letters also include confidentiality agreements, which must be returned by July 16 in order for those parties to be considered as potential investors.

Those investors will then receive more comprehensive information about the company toward the end of July 2008.

"Kuebler also asks the public to be aware that no information may be published on prospective investors or the state of negotiations until successful conclusion of the required discussions with investors in order not to jeopardize these discussions through indiscretion," the company states,

FMI: www.thielert.com