Cessna-Columbia Deal Confirmed; Cirrus Says That's a Good Thing
Columbia Aircraft confirmed on Monday that it is entertaining an offer from Cessna for the company, but few details are being released. Columbia issued news releases late Monday confirming the deal and also announcing that Columbia has applied for bankruptcy protection under Chapter 11.
Cessna CEO Jack Pelton declined to confirm the rampant rumors of the deal in front of the world aviation media at the National Business Aviation Association convention in Atlanta earlier on Monday. "We try not to confirm or speculate on rumors that might be out in the press regarding [the] potential acquisitions," he said.
Columbia issued news releases in the evening that confirmed the deal and also announced that the company was seeking bankruptcy protection under Chapter 11. "We have explored many options over the past months," said Columbia Chief Restructuring Officer Carl Young. "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."
Cirrus Design co-founder Dale Klapmeier told AVweb Monday that Cessna's planned acquisition of Columbia Aircraft "is going to help our industry." In an exclusive interview with AVweb, Klapmeier said the move by Cessna not only validates the effort of Cirrus and Columbia in modernizing general aviation aircraft, it adds significant clout to get that message to potential aircraft owners. "It opens up the market to more people," Klapmeier said. "It validates what we've been saying for a decade now."
The Columbia news release says the sale to Cessna is contingent on the bankruptcy court's approval and a final agreement with Cessna. According to the news release, Cessna has signed a letter of intent to buy certain assets and assume some of Columbia's debt. Young said that the deal ensures that existing owners and position holders will be looked after. "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. Cessna is excited about the prospect of adding the Columbia products to its product line and will provide additional capabilities, world-class processes and financial strength to effectively serve existing Columbia customers and grow the business. Under the agreement reached with Cessna all product warranty and service issues will continue to be honored post-acquisition and customers should expect an enhanced customer experience once the deal closes," Young said.