Mon, Jul 21, 2003
Some Question Purchase Of $100 Million In Piper Debt
Let's say you're
preflighting your aircraft, alone on the ramp in the pitch of
night, when suddenly, you hear a hushed voice from just a few feet
away. "Pssst, buddy. Have I got a deal for you." What would your
first reaction be? For a lot of us, we'd ask, "What's it gonna cost
me?"
That's a question asked in Sunday's Vero Beach (FL)
Press-Journal. In an editorial on New Piper's new-found
friend, American Capital Strategies, the paper urges "cautious
optimism." ACS has purchased $100 million in debt from the
struggling GA manufacturer, giving New Piper a little breathing
room after a round of bitter layoffs and a cloudy horizon to boot.
But the debt purchase is little more than a brief respite for New
Piper. Says the Press-Journal, "Clearly, despite the
newfound financial support, Piper must still stand on its own.
That's no mean feat in the aviation sector whose ongoing slump has
depressed sales and erased profits. Given those difficult odds,
Indian River County would be well-served to continue its pursuit of
diversified business development. Until this area begins attracting
significant numbers of well-paying jobs, the local economy remains
vulnerable."
ACS has a somewhat spotty record of
late.
While, according to the Vero Beach paper, the financial provider
is certainly no debt vulture, it has pulled out of seven ventures
so far this year. "(A)nalysts have noted recent slippage in its
loan performance," said the editorial. "This has trimmed both
valuation and stock price." The question may be, how long will ACS
maintain the status quo.. or is additional financing in the offing
(as rumored) to restore New Piper to a position of prominence?
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