Enters Cooperative Joint Venture Agreement For Production In China

Groen Brothers Aviation, based in Salt Lake City, is part of the latest headline involving a Chinese investment in US aviation. In a news release dated Saturday, a deal that had been the subject of rumors in the gyroplane community was confirmed. Groen Brothers has formed a wholly-owned subsidiary called Groen Brothers Aviation International, LLC for the specific purpose of entering a cooperative joint venture with China's Guangzhou Suntrans Aviation Science and Technology Co., Ltd.

Terms of the agreement call for GBA to transfer the SparrowHawk kit gyroplane program and certain advanced gyroplane technology in exchange for 25% of the shares, valued at the equivalent of about $3.67 million US. Suntrans will contribute 11-million dollars US in cash, and hold the other 75% of the shares. The new joint venture will be called Foshan Suntrans-Groen Aviation Company, Limited, or "FSG Aviation." The start of operations is awaiting only a green light from Chinese regulators.

Groen Brothers Aviation has kept the lights on, but not much more, the last couple of years. The company, whose stock trades on the pink sheets and was valued at 3 cents per share at Friday's market close, made exciting news when it interested DARPA in its heliplane technologies in late 2005. But partner Adam Aircraft went bankrupt, other delays followed, and by May of 2008, GBA announced it was laying off two-thirds of its workforce, and discontinued production of the SparrowHawk III two-place gyroplane kit. Existing owners have been reasonably well supported from parts in stock in the years since, but this new deal may ease some worries in that area.

GBA says the deal is expected to result in the reintroduction of the SparrowHawk in the US market, "...followed over the next few years by a fully assembled light gyroplane using technology transferred by GBA." It's not clear when a factory-assembled gyroplane could be sold in the US market. Currently, the FAA does not allow the sale of factory-built gyroplanes as Light Sport Aircraft, although a few manufacturers plan to continue that discussion with the FAA this week at Sebring. In any case, the SparrowHawk was a little portly to claim a 1,320-lb. gross weight. GBA advertised 1,500 lbs.

There hasn't been a Standard Airworthiness Certificate issued for a gyroplane by the FAA since the 1960s, and manufacturers have found the niche too small to justify the funding necessary to pursue one. As a result, with the exception of a few museum pieces, the entire US gyroplane fleet consists of experimentals.

At the time the SparrowHawk program was put up for sale by GBA back in 2008, it was thought it might bring $2 million to help get the company's DARPA work back on track. The $11 million deal with Suntrans, which includes "certain advanced gyroplane technology," suggests that this involves the sale not only of a small aircraft program, but part of the Groen Brothers' larger dream.

FMI: www.groenbros.com