ATE SA commences business rescue proceedings

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Aviation company Advanced Technologies and Engineering Company (Pty) Ltd has given notice of a resolution passed at a special Board of Directors meeting late last month, to commence business rescue proceedings in terms of Section 129 of the South African Companies Act 71 of 2008.

“ATE expected certain major international contracts to have been awarded, which did not materialise in the anticipated timeframe,” the company says in a notice. “In September 2011, a substantial foreign debtor of ATE defaulted on an undertaking to make a large payment of several overdue invoices, which caused ATE to become financially distressed (as contemplated in Section 128 (1) (f) of the Act), as it became likely that ATE would not be able to pay all of its debts, as they fall due within the ensuing six months.
“The effective date of commencement of such business rescue proceedings is confirmed as 4 October 2011.” In accordance with Section 128 (1) (b) (d) of the Act, the Business Rescue Proceedings are intended to facilitate a process, which includes the following:
– Appointment of a business rescue practitioner for temporary supervision of the company and the management of its affairs, business and property;
– a temporary moratorium on the rights of enforcement of certain claims against the company; and
– Development/implementation, if approved, of a rescue plan aimed at restructuring the affairs, business, property, debt, other liabilities and equity, in a manner that maximises the likelihood of the company continuing in existence on a solvent basis.
“ATE undertakes to keep you informed on a continual basis. Should you wish to communicate during this process, you are kindly invited to forward an e-mail to [email protected], to which we will gladly respond,” CE Willie van Biljon said.

The company is design authority for the navigation and weapons system (NWS) of the South African Air Force’s fleet of 24 BAE Systems Hawk Mk120 lead in fighter trainers. The NWS was developed under a R500 million (US$73 million at the time) prime avionics subcontract from BAE Systems, the first time that the latter has placed such a contract with a foreign company. BAE Systems Hawk South Africa Project Director Mike Rennardson in May 2006 said the order, when placed in April 2000, was the “biggest ever contract placed on a South African private sector aerospace firm.”

ATE has previous experience in this field, having developed the avionics for the Rooivalk attack helicopter, the Pilatus Astra primary trainer and the NWS and mission computer for the Spanish Air Force’s Mirage F-1 upgrade. The company also modernised a number of Algerian Air Force Mi-24 attack helicopters. ATE’s NWS is a fully configurable “glass cockpit” integrated with an advanced navigation and mission computer system and an `intelligent’ stores management and weapons-delivery system.

ATE is also the original equipment manufacturer for the SA Army’s Vulture unmanned aerial system (UAS), acquired under Project Klooster. There has been speculation that a system was sold to China. In June 2009 the company said it had won a first export order for its Kiwit Mini Aerial Observation System (MAOS). A company spokesman said the sale was to an undisclosed Asian country.

The Kiwit has an endurance of one hour at an altitude of 500 feet above ground level and can perform aerial observation tasks at ranges of up to 5km. The air vehicle weighs 3.5 kg and takes 10 minutes to assemble. It made its debut at Africa Aerospace and Defence (AAD) show in Cape Town in September 2008. At the time the company also hoped to sell the system to the SA Police Service to support Operation Kgwele, the FIFA Confederations Cup and World Cup security undertaking.

Also in June 2009, ATE and European helicopter giant Eurocopter announced they were developing a new-generation Stand-Alone Weapon System (SAWS) suitable for any of the EADS subsidiary’s light and medium helicopter products. A prototype was unveiled at the Paris Air Show, fitted to an AS550 Fennec light military helicopter. In a joint media release the two companies say the SAWS addresses “increased market demand for helicopters incorporating a weapon system able to match evolving mission scenarios in current and future conflicts.” It was later reported the system was being developed for a Middle Eastern customer.



Business rescue proceedings are a new phenomenon in South African law and is similar to the US “Chapter 11” bankruptcy proceedings.