Menands manufacturer Albany International Corp. has said it will have to waive up to $ 7.4 million in unpaid bills charged to bankrupt jet company Eclipse Aviation Corp.
Albuquerque-based Eclipse filed for Chapter 11 bankruptcy protection on Nov. 25, citing more than $ 1 billion in debts. That includes the $ 7.4 million owed to Albany International (NYSE: AIN) for aircraft parts.
The aircraft work affects Albany International’s composites division, which had a net loss of $ 3.3 million in the third quarter of this year. The company now expects the division to sustain net losses throughout all of next year, as a result of the drop in orders from Eclipse, which was the division’s largest customer.
In a Nov. 26 regulatory filing, Albany International said the composites division, which relies on aerospace customers, will “resume its rapid growth in 2010” with or without future sales to Eclipse.
Albany International expects it will need to write off most, if not all, of the .4 million that Eclipse owes. That write-off will occur in the fourth quarter, the company said.
The company also expects to take a $ 3.8 million write-down in the fourth quarter, accounting for equipment and inventory related to Eclipse.
The composites division has taken in $ 18 million in revenue through September, according to regulatory filings. Albany International executives believe the division will eventually generate $ 400 million in annual revenue.
In court papers, Eclipse has said it wants to sell almost all of its assets. The company will remain operational as it restructures, but it has halted orders from Albany International.
Albany International could recover the money that Eclipse owes during the course of bankruptcy proceedings, but Albany International officials said it is too early to determine how much money the company could receive, if any.
Albany International has pushed into aerospace while still retaining its core business of making custom fabrics and belts designed for the paper mill industry. The company generated $ 1.09 billion in revenue in 2007, an 8 percent increase over the year before.
Albany International has cut jobs in the Albany, N.Y., area and elsewhere over the past couple years, and now employs 6,000 people in 14 countries, including 213 in the Albany region.