A European private investment firm will become the largest shareholder in Eclipse Aviation in a deal that paves the way to establish a new production facility for the New Mexico company´s very light jets (VLJs) in Russia.
Amsterdam-based European Technology and Investment Research Center Aviation (ETIRC) has agreed to invest "over $ 100 million" in Eclipse and its CEO, Roel Pieper, was named chairman of the privately held company. The deal provides financial relief to the cash-strapped VLJ pioneer, which has been scrambling for additional funds after supplier problems delayed the ramp-up of Eclipse 500 production last year. Eclipse Founder Vern Raburn remains CEO of the company.
Specific financial terms of the deal were not disclosed. But in return for the equity investment, ETIRC won the right to manufacture Eclipse 500 jets for the European market and Turkey, complementing Eclipse´s existing final assembly facilities in Albuquerque, N.M. The investment firm said the leading candidate for the location of the new facility was the Russian city of Ulyanovsk. Production is not expected to begin there until late next year.
Raburn said the new production facility would help meet higher-than-anticipated demand for Eclipse 500s outside the U.S. and insisted it was not aimed at offshoring work to a lower-cost location. "We are not planning to ramp down production in Albuquerque," he said at a Jan. 14 news conference, adding that the company plans to hire 700 more employees in New Mexico this year.
The deal also names ETIRC as the exclusive provider of Eclipse 500 sales, customer service, maintenance support and flight training for Western Europe and the U.K. The investment firm previously secured a similar position for Russia, Eastern Europe and Turkey and now holds such rights for more than 60 countries. "It is a huge territory that is economically exploding," said Pieper.
Harold Poling, the Ford Motor Co. veteran who was Eclipse´s longtime chairman, has stepped down from the post to make way for Pieper but will remain on the company´s board.