Sino Swearingen Aircraft Corp. has a new majority stakeholder, which the San Antonio-based jet maker said means it finally has the funding to increase production of its SJ30 business jet.
Action Aviation Investments, a joint venture between Action Aviation and ACQ Capital, has bought a controlling interest in the company. Action Aviation is Sino´s distributor to Europe and the Middle East. ACQ Capital is a California-based investment firm.
ACQ Capital Chairman John Sabovich said in a statement that he has "fallen in love" with the SJ30.
Company officials announced the investment Tuesday at the National Business Aviation Administration trade show in Atlanta. Officials said in a statement that the investment means Sino would have the financing to move forward with full-scale production of the .9 million jet.
"Action Aviation is the perfect partner for us," Sino Chairman Max Lo said in a statement. "They bring industry knowledge, resources and enthusiasm for our future."
Sino Swearingen´s jet production slowed to a crawl last year after it announced in June 2006 it would add 850 new jobs and build a million expansion at San Antonio International Airport. The company laid off 100 workers six weeks later. Another 77 were laid off this summer. The company said it had about 280 jets ordered, but no way to mass-produce them.
Sino´s top investor, the Taiwanese government, had spent $ 600 million on the project since 1995. The government was considering pulling out of Sino following a monthlong audit this year.
It´s not unusual for investors to lose patience with aviation projects that once captivated them.
Now Taiwan is finished calling the shots at Sino, though the government still will have representation on the company´s board of directors.
"I think this is what we need, to get it in the hands of a businessman so it isn´t micromanaged from the other side of the world," minority stakeholder Doug Jaffe said. He is Sino´s first customer.
Action Aviation is Sino´s second customer. The distributor took delivery of its SJ30 during the Atlanta trade show. Jaffe said Action is a good investor for the company because it knows the jet so well.
"I am proud to be part of Sino Swearingen´s new beginning," Action Aviation Chairman Hamish Harding said in a statement.
The deal raised some red flags for aviation industry analyst Richard Aboulafia of the Teal Group in Fairfax, Va.
"The primary customer for a jet, also having financial responsibility to start up volume production — that´s highly unusual to say the least," Aboulafia said. "Is this a genuine rescue?"
Aboulafia questioned why the Taiwanese wouldn´t increase production rather than take a minor position behind Action Aviation. "Why are the Taiwanese so eager to leave?" he said. "You would think they would want to cash out at a higher valuation."
Jaffe said he has seen the business plan, and that plan calls for increased production of the jet. The wings and fuselage are built in Martinsburg, W.Va., and the parts are assembled in San Antonio. Last summer, West Virginia tried to lure assembly of the jet, but local and state leaders fought to keep it here.
"It´s exciting to see someone else come in that can keep the company moving forward," said Mario Hernandez, president of the San Antonio Economic Development Foundation. "I think everyone was a little worried about it. A lot of people worked very hard on the project from the state level to the local government."
Financial details of the deal were not disclosed. It is scheduled to wrap up by the end of October.
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