Investor group studies reviving SPn program

 - March 30, 2009, 7:22 AM

Former Grob Aerospace chief executive Niall Olver has confirmed that he is actively trying to put together a deal to restart development of the SPn light business jet, which was suspended when the group had to initiate insolvency proceedings last year. One option being considered in talks with undisclosed interested parties is that they would establish a fund with which they would jointly buy the SPn assets from the main Grob Aerospace creditor.

The SPn assets are now held by a new–and as yet unnamed–company that is wholly owned by the creditor. The insolvency process is essentially complete and the German administrator who handled the process for Grob Aerospace GmbH–Grob Aerospace Group’s Germany-based operating company–no longer has any involvement in the resale of the assets. The claims of other Grob creditors were dealt with in January when the administrator sold the Group’s trainer aircraft business to Germany’s H3 Aerospace of Munich, which will continue operations of this business under the name Grob Aircraft AG.

The main creditor has given Olver a mandate to assemble a group of new investors to buy the unnamed company that is holding the SPn assets (including intellectual property rights for the design and the three prototype aircraft). He has indicated that the new owners could include SPn customers and suppliers.

Olver told AIN that it is not yet clear exactly how much fresh capital would be required to complete certification of the SPn and get it into service. However, he said that there would be no need to change either the technical basis for certification or the aircraft’s position in the market.

“Nothing has changed except the timeline,” said Olver. “The aircraft is, and always has been, technically sound and to date we do not consider changing anything on the functional design or market positioning.”

The team working with Olver on the campaign to resurrect the SPn includes former Grob Aerospace managers Dr. Andreas Strohmayer, Hans-Jürgen Hölzel and Cédric Migeon. Olver also reported continued support from key program suppliers for the idea of resuming work on the SPn, which he said could start immediately after ownership of the program has been finally resolved.

A key to getting the aircraft certification process will be reassembling the SPn engineering team. Olver said that about two thirds of these former Grob employees have indicated a willingness to return to the program, even those who have now found other employment. The plan is to resume development work at an airfield site in southern Germany, but the program would not remain at Grob Aerospace’s Tussenhausen-Mattsies facility, which is now occupied by H3 Aerospace’s new trainer aircraft subsidiary.

A change of location would also have the advantage of allowing all flight testing to be conducted in-house. In the past some of the flight testing had to be done in Memmingen in Germany and in Spain because Tussenhausen-Mattsies’ landing strip was too short.

Olver’s team is now reworking the SPn business plan to account for changes in the marketplace since Grob Aerospace’s insolvency. Team members are convinced that the aircraft is still relevant to the market and that it will still deliver cutting-edge technology, if they achieve the revised goal of completing certification in a few years. In particular, the team would be asking avionics supplier Honeywell to account for any possible upgrades from the Apex cockpit suite originally selected for the SPn.

Before Grob Aerospace GmbH entered the insolvency process last August the aircraft had been due to complete certification by the end of 2008. The company was preparing to deliver the first 35 aircraft this year before increasing annual production to 48 units. All SPn sales contracts were legally dissolved when Grob was officially declared insolvent on November 1.

At face value, the completion of Grob Aerospace’s insolvency process may have simplified the task of trying to restart the SPn program, according to Olver. This is because there are no longer multiple parties seeking to stake a claim in the remaining assets and the immediate time pressures imposed by the administrator no longer hold sway.