Sat, Apr 12, 2008
Shares Fall On Word Big Selloff Looming
Shares in German aircraft engine manufacturer Thielert AG fell
to their lowest levels in three years, after news surfaced the
company planned to sell off shares to raise funding and oust CEO
Frank Thielert.
Bloomberg News reports Thielert said Friday the diesel engine
manufacturer "is threatened by an urgent liquidity crisis, which
was triggered by investments already made and delays with the
series delivery of airplane engines to airplane manufacturers." The
company aims to raise some 24.4 million euros ($38.5 million US) by
selling shares.
Though demand for its powerplants has increased steadily in the
past two years -- with aircraft makers such as Diamond and Cessna
offering factory-spec new aircraft equipped with Thielert diesels
-- the company has a decidedly rocky financial history. Thielert
has delayed releasing its 2007 earnings report until the end of
April, citing the need to reexamine results from previous years.
That decision came after a German court tossed out Thielert
earnings statements from 2003 through 2005, due to valuation
discrepancies.
BHF Bank analyst Jochen Klusmann said news of Thielert's need
for cash should come as surprise to no one in the industry. "Anyone
who was surprised has been sleeping for the past weeks," said
Klusmann. "The bottom line is the company has booked relatively
high sales and profit, but never has had good cash flow."
The company's board also requested the removal of Frank Thielert
as CEO, as well as the ousting of Chief Financial Officer Roswitha
Grosser. Thielert will continue to serve as chief operating officer
once a new CEO is appointed, according to reports.
For the short term, Thielert shareholders have granted an
emergency 2.65 million euro loan, due for repayment in two years.
Outside banks have extended the company another 5.5 million euros
in new credit lines.
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