Canada Denies Diamond Loan Request
Diamond Aircraft will have to find other ways to get the funding it needs, said President Peter Maurer this week, now that the Canadian government has turned down a request for a $35 million loan. The company has been working to find private investors to keep the company and its D-Jet program going while waiting for a decision from the government, but so far nothing is nailed down. The longer it takes, the harder it will be for the company to stay in its current location in London, Ontario, Maurer said. "There are some good, viable prospects out there" to provide the funding Diamond needs, Maurer told the London Free Press, but "it will take time." He said the delay also means more laid-off workers from the D-Jet program will find jobs elsewhere, making it harder to re-start when funding is secured.
Maurer also said the company is counting on the jet program to repay its existing debt obligations. "It would not be reasonable to expect that we would be able to service those debts with piston sales," he told the Financial Post. Diamond has over 200 orders for the D-Jet, which sells for $1.9 million. Industry Minister Tony Clement told the Free Press that the government had already invested $20 million in the company through a research and development fund, and felt to add another $35 million for operating expenses was not in the taxpayer interest. "We are stewards of taxpayers dollars and we have risked, quite rightly, $20 million in taxpayer dollars to date, and it is not judicious to up that by another $35 million," Clement told the Free Press. "We hope the company Diamond continues to be part of the scene in London. We do not wish for its demise." Diamond has laid off more than 200 workers, just over half its workforce, while trying to raise the money it needs.