Adam Aircraft has suspended operations at its Colorado facilities. In a short news release, the company said the action was taken “due to the inability of the company to come to terms with their lender for funding necessary to maintain business operations.” The news release doesn’t identify the lender, but previous rounds of financing, totalling almost $300 million, have included such major investment houses as Goldman, Sachs and Co. and Hunt Growth Capital as participants.
In January, Adam announced that it needed $30.5 million in interim financing to allow its current financial partner, Citibank, the time to find the $75 million to $150 million it needed to get into production and start selling against a backlog of orders the company estimated to be worth $1 billion, according to some reports. In a letter to shareholders leaked to the media in late January, CEO John Wolf said that if the company didn’t have the $30.5 million by the end of January, the company was likely doomed. Monday’s announcement seems to echo that sentiment while leaving the door for a miracle open a crack. “The company is currently exploring all of its alternatives and will provide further guidance when decisions are made, which is expected to be later this week,” the release said.
As little as a week ago, company officials were claiming that the search for funding was continuing and that production of the fifth A700 jet was under way. The jet has not achieved FAA certification but the A700 push/pull piston twin has. Adam has reportedly sold 17 of the piston aircraft and delivered seven. Meanwhile, the city of Pueblo, Colo. didn’t wait for Monday’s announcement to demand $2 million in incentives it says should be returned. The city says Adam promised to create 448 jobs and actually created about 90, most of which disappeared in a round of layoffs and plant consolidations in January. The city of Pueblo has placed liens against Adam’s equipment in the city-owned buildings that were part of the incentive package.