A business rescue plan for the Ahrlac aircraft has been adopted, which should lead the way to the reopening of the factory and production resuming.
Paramount Group made the announcement on 21 October, saying the business rescue practitioner, from PricewaterhouseCoopers, had announced the successful adoption of a business rescue plan supported by Paramount Aerospace Holdings for the Aerospace Development Corporation (ADC), the manufacturer of the Ahrlac.
“The Business Rescue Plan will secure the future of the Ahrlac aircraft, its employees and will see the resumption of sales, marketing and manufacturing of the aircraft to customers around the world,” Paramount said.
The company added that the Paramount Group has already injected new capital in the form of post commencement funding, and will inject significant further capital into the business over the coming months.
ADC was placed into business rescue when an application to the North Gauteng High Court was made on 28 February 2019. 50% shareholders of ADC, Paramount Aerospace Holdings, together with the directors of ADC, applied for business rescue and a business rescue practitioner, Stephan Symth, was appointed on 12 April 2019.
The business rescue practitioner drafted a business rescue plan in August. It stated that ADC “was beset by a range of financial, commercial and operational challenges triggered as a result of the breakdown of the relationship between the shareholders [Paramount and the Potgieter family] and various deadlocks at the board level.” Governance, record keeping, data management, organisational structures and contractual relationships was at times poorly managed. The ADC Group before business rescue was run by shareholder representatives who were not able to reach agreements on their respective roles and obligations and “the parties were unable to resolve the various disputes, resulting in operational and financial disputes, which resulted in the Company being unable to raise working capital, and ultimately a liquidity crisis,” the Business Rescue Practitioner found.