Adam’s Future in Balance

Despite expectations of an late-week announcement, at press time there was no further news on whether Adam Aircraft will continue or liquidate, having failed to achieve the financing it needed to continue forcing it to shut down. In the latest chapter in Adam Aircraft’s troubles, the company suspended...

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Despite expectations of an late-week announcement, at press time there was no further news on whether Adam Aircraft will continue or liquidate, having failed to achieve the financing it needed to continue forcing it to shut down. In the latest chapter in Adam Aircraft’s troubles, the company suspended all operations pending explorations of all its options to gain additional financing, Spokesperson Shelly Simi told VLJ Report. Adam is seeking between $75 million and $150 million in long-term financing with the help of Citibank.
In mid January, Adam imposed layoffs and shortly thereafter sent a letter to investors saying it would be forced to liquidate if it fails its two latest attempts at financing before the end of January. The company has a backlog of 400 for the A500 twin piston and the A700 very light jet.
“In a difficult, but necessary, move, Adam Aircraft Industries suspended operations February 11 at its facilities in Colorado,” said its release posted on its web site last Monday night. The 500 remaining employees received their pink slips just after lunch that afternoon. “This measure was required due to the inability of the company to come to terms with their lender for funding necessary to maintain business operations. The company is currently exploring all of its alternatives and will provide further guidance when decisions are made, which is expected to be later this week.”
Both Eclipse and Epic, two other VLJ manufacturers, were able to secure additional financing recently by tapping international investors in Russia and India, respectively. Epic’s investor, Dr. Vijay Mallya also owns Indian regional airline Kingfisher Airlines. Mallya wants to manufacture that very light jet in India and market the Asian-produced aircraft to the Middle East and Asia.
Despite the troubles, its Pueblo, Colo. employees remained hopeful, according to the Denver Post, which interviewed the 20 employees gathered at a local restaurant. "We're all here tonight because we love this company," quality control worker Ray Romero told the Post. "We want to be there, but there's no money. We're a privately funded company. We have a beautiful product."
Previous investors, who have invested $300 million in the fledgling company, have included Goldman, Sachs and Hunt Growth Capital. The company is estimated to be worth $1 billion by some analysts. In addition, after affording the company $2 million in incentives on the promise Adam would create nearly 500 jobs in the community, Pueblo, Colo. put a lien on its equipment there and was demanding its money back, since its earlier layoffs eliminated nearly all of the 90 jobs already created there.