Taiwan Sells Swearingen Stake
The Taiwanese government has invested $426 million into Sino Swearingen Aircraft Corp. (SSAC) since 1995, but now plans to sell most of its shares in the company for $150 million. The buyer is said to be UAE and UK-based venture capital firm Action Aviation, and the sale would provide it an 80-percent holding in Swearingen, leaving Taiwan and original investors with the remainder of their 91.6 percent share.(If that sounds familiar, Action Aviation was involved in a previous deal with ACQ Capital, of California, last September, to buy Sino Swearingen but ACQ pulled out of that deal.) Taiwanese press reports have said Swearingen, which currently has orders for 270 jets, would need a $300 million infusion to put the company on track for profit and the Taiwanese government is not interested in taking on the risk. One unnamed official has said Sino Swearingen would have to file for bankruptcy without a new cash infusion, according to Middle East Online. Some Taiwanese editorials have been critical of the government's decision, framing it as a waste of money to set up Sino only to sell it to a foreign firm now that the manufacturer has started to deliver. However, the government says SSAC continues to lose money. The $5.5 million seven-seat SJ30 business jet was certified in October 2005 -- first delivery took place one year later. Production delays lost the company an estimated $20 billion.