Groen Brothers Enter Agreement With China

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An agreement between Groen Brothers Aviation International LLC (GBA) and China's Guangzhou Suntrans Aviation Science and Technology Co. Ltd. will see light gyroplanes produced in China for sales worldwide. The deal creates a cooperative joint venture under a new entity, Foshan Suntrans-Groen Aviation Co., and creates infrastructure to produce and support GBA's SparrowHawk III, GBA's company's most advanced offering. GBA says the venture allows them an opportunity to introduce a safe and easy-to-fly product to the Chinese public as China opens up airspace below 3,000 meters and ushers in "a new generation of private pilots." It will also transfer GBA's technology into the joint entity and ultimately seeks to introduce new aircraft to the U.S. and world markets. The details of the arrangement appear to leave GBA with less influence in the long run.

Through the agreement, the Chinese partner will bring $14.7 million to the venture and retain 75 percent of the new entity's shares. GBA will contribute its technology and hold 25 percent of the new company's shares. In 2005, GBA was awarded a contact under DARPA to create a proof-of-concept, high-speed, long-range vertical takeoff and landing aircraft for use in combat search and rescue. The company was funded through the first phase of the program, but DARPA has not announced funding for a second phase. In 2008 GBA reduced its workforce by two-thirds and its stock fell to six cents. China is still waiting on approval from Chinese regulatory authorities.