By DAN HEATH
Staff Writer
July 08, 2008 05:46 am
—
PLATTSBURGH -- It's taking Laurentian Aerospace Corp. longer than expected to secure equity financing, but its officials remain cautiously optimistic the deal will happen.
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Chief Financial Officer Andrew Edwards said Laurentian has commitments and interest for more than the approximately $55 million in equity financing it needs.
"We have four parties interested in participating. They don't feel they have the technical capability or manpower to do the due diligence process," he said.
Chief Executive Officer Robin Wohnsigl said the problem remains finding a lead investor.
"We continue to be cautiously optimistic. Trying to put a final date on this thing is like putting Jell-O on a wall and making it stick," he said.
The sub-prime housing crisis and other economic developments have dried up much of the credit available for such a project. At a time like that, cash is king, Edwards said, so Laurentian has turned to private equity funds for its financing.
The problem is, many other projects are also seeking financing from those sources.
"They're being distracted because so many opportunities are coming their way," Wohnsigl said.
The private equity funds tend to fund projects in industry sectors they are familiar with, which is not the case for Laurentian. Still, interest remains high, Edwards said. "They like our story. They like our business plan. They like our management team."
Edwards said Laurentian officials are working with The Liati Capital LLC., based in New York City, to attract investors. That company's president, Michael Geffrard, has experience in New York state and city government.
"He also knows the Wall Street crowd well," Wohnsigl said.
Geffrard said Liati remains very confident and enthusiastic about Laurentian. He said the location, management team, local support, especially on the economic-development front and enhanced value of the project in light of rising fuel prices make the project special.
Liati's job is to bring the project to investors it's worked with in the past or ones where they know people who have worked with them in the past.
There are ongoing discussions with potential lead investors, Geffrard said.
"No one has said they don't think it's a good project."
The company is confident it is likely to be one of the investors, he said.
The remainder of the $180 million in financing will be through $125 million in tax-exempt bonds to be issued through the County of Clinton Industrial Development Agency. Edwards said all of the approvals needed for the IDA are in place, and preliminary discussions with a major bond purchaser are positive.
Laurentian's plan calls for a 273,000-square-foot maintenance, repair and overhaul hangar for required scheduled maintenance of wide-bodied aircraft. The building, to be built on the flight line at Plattsburgh International Airport, would be more than twice the size of the Target store being constructed at Champlain Centre.
Laurentian expects to initially employ 200 to 300 people, with up to 900 once the hangar is in full operation. If things go as company officials expect, there could be a second and even a third hangar.
Each hangar will have two bays that can handle all wide-bodied aircraft except the Airbus A-380 and the Boeing 747-800, which is in development. Each bay will have a state-of-the-art computer-operated, laser-guided docking system, capable of positioning work platforms within one centimeter of the aircraft within 30 minutes of arrival.
It saves about a day on each end of the process, while an airline expects to lose about $200,000 each day a plane is out of service.
Edwards said there is little concern about someone else doing the same type of project in North America. That's partly because Laurentian has a very strong relationship with Multidocking Contec Ltd., which manufactures the docking system.
A number of airlines and carriers remain interested in using Laurentian's services. They include Air Canada, American, Delta, Northwest, United, Federal Express and UPS.
Laurentian's competitive position has been enhanced by rising oil prices, Edwards said, because that has dramatically increased the cost of sending aircraft overseas for required maintenance checks.
Meanwhile, Laurentian continues to seek a lead investor.
"We have a number of discussions that are ongoing that have the potential to break the logjam. It could be a month from now, or it could be within 24 hours."
dheath@pressrepublican.com
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Photos
Laurentian Aerospace Corp. Chief Executive Officer Robin Wohnsigl
Laurentian Aerospace Corp. Chief Financial Officer Andrew Edwards