Cessna Announces Plans To Acquire Columbia Aircraft
September 25, 2007 — Cessna Aircraft Company confirmed Monday that it is seeking to acquire parts of Columbia Aircraft Manufacturing Corporation. According to a joint news release, the two companies signed a Letter of Intent (LOI) stating Cessna would acquire "selected assets and certain liabilities" of the Bend, Oregon-based aircraft manufacturer.
"Columbia's unique capability in the high-end single-engine piston market makes it a perfect complement to our Next Generation Piston product line and could provide our customers with the option of an outstanding low-wing, high-performance piston airplane," said Cessna Chairman, President and CEO Jack J. Pelton. "We believe the combination of this superb product line and Cessna's world-class support structure and brand will be unbeatable."
Also announced Monday, Columbia filed for Chapter 11 bankruptcy protection allowing the company to continue manufacturing, new aircraft delivery, and parts, warranty and technical assistance support. Carl Young, Columbia chief restructuring officer, stated in a press release, "This path enables the company to manage its present cash flow and liabilities while pursuing a plan that enables us to continue operating until a final sale can be completed."
Columbia's motion with the Bankruptcy Court seeks approval of the sale along with establishment of bidding procedures so other interested bidders can submit offers and bid at an auction to be held in November. The sale to Cessna is contingent upon the approval of the Bankruptcy Court and the satisfaction of the closing conditions of the LOI, including the execution of a definitive purchase agreement with Cessna.
"The sale of Columbia Aircraft Manufacturing assets to Cessna offers the best avenue to maximize value for all of Columbia's stakeholders and existing and future customers," Young said. According to the agreement, Cessna would honor all product warranty and service issues after the acquisition.