A new owner for Symphony Aircraft, which filed for bankruptcy last year, is expected to take over operations next month. But the big question is who?
A bid for the company, which has been in liquidation for the past year, was made earlier this year by a Canadian firm. If all goes well, that firm brings an “eight-digit equity financing package” to the company, according to Lou Simons, who has been an executive in the steel business, as well as a real estate developer. He’s also Symphony’s largest creditor, and he was at AirVenture this summer to assure the industry that Symphony will be back — one way or another.
“The liquidation is taking far longer than the lawyers expected,” he said, noting it was expected to be complete in April, but was pushed up to the fall.
If the other party withdraws from the deal, Simons said he’s ready to take over Symphony.
“If they can’t buy it, we’ll start production again,” he promised.
Simons, who says he was the “angel investor” for the restart of Symphony in Canada, has been interested in aviation for the last 50 years. A Naval Aviator, he got back into flying in 1995. He got interested in Symphony after he bought one of the company’s airplanes. “I liked it so much, when the company ran into difficulties, I said ‘it’s a shame to let it go down because this is such a good aircraft.’”
While the aircraft is good, the economics surrounding the company weren’t, he noted.
Symphony has a long — and troubled — past, with the aircraft starting as the property of OMF Symphony, a German company that opened a North American production facility in Quebec, Canada, before filing bankruptcy in 2004. After that failure, a group of employees, led by Paul Costanza, bought the assets of the company and produced its first aircraft in 2005.
The decision to locate in Canada was based on several factors, including the favorable exchange rate, as well as significant tax advantages. But a “dismal” market for venture capital meant the company couldn’t attract the equity investment it needed to continue operations in the face of unexpected certification delays.
The company was forced into bankruptcy last summer largely by non-aviation suppliers, Costanza said at the time.
Also impacting the company’s fate was the rise of the Canadian dollar. “It was 75 cents when we started and 90 cents when we liquidated,” Simons said. “That created hardship on an industry that relies on exports to the U.S.”
The last straw was a delay in FAA certification of the glass cockpit. Originally expected to take one month, Simons is still waiting for it, saying he thinks it will be in hand by October.
Even with all the troubles, Simons remains optimistic. “We are as enthusiastic and committed as we were three years ago,” he said. “I think this airplane excels as a replacement for Cessnas. The demand is undiminished — actually it’s increased because of the rising demand for pilots.”
The two-seat, high-wing Symphony 160 has always been marketed as a cost-efficient trainer. Initial marketing efforts of the new owner — whoever that may be — will be flight schools, according to Simons.
If Simons takes over the operations, he plans to relocate part of the production and assembly to the U.S. While several communities have been brought to his attention, he hasn’t decided on one yet, waiting to see if he will be the man in charge next month.
“I won’t make any decisions until I see if we have to restart the company or if the other company will be buying the assets from us,” he said.
Either way, he predicts the first Symphony 160 from the new owners will be delivered in 2008. “The plan is the same as it was before,” he said.