HELSINKI — A local consortium headed by Danish industrialists Peter Bennedsen and Sønder Felding has acquired the trading name and core assets of defense company Danish Aerotech A/S, which was placed into a court-supervised judicial liquidation process in December 2015.
Bennedsen, through his privately owned company Danish Aerotech Sales A/S, is now engaged in drafting a business re-capitalization and management plan for Danish Aerotech, with the intention of re-building operations around its aircraft maintenance and weapons systems' activities.
"It may take several months to determine what parts of the business can be saved and which have the potential to operate on a sound and profitable basis going forward," said Bennedsen.
Legal documents to dissolve Danish Aerotech were filed with the Ddistrict Ccourt in Herning in December. The court had appointed the Aarhus-based law-firm Abel & Skovgaard Larsen to lead the liquidation process.
Danish Aerotech's economic situation deteriorated during the second half of 2015 after the company saw a substantial decline in projected revenues and profits for the year due to delayed contracts coupled with the failure of some orders to materialize from international customers.
The serious depletion of Danish Aerotech's order-books, and resulting impact on profitability, proved decisive in persuading the owners in the Karup-headquartered company to file for a judicial liquidation, said Danish Aerotech's CEO Jan Jørgensen.
"The decision was made based on the company's weakened financial condition. We had projected revenues from important foreign orders that did not happen. It put us in a bad situation," Jørgensen said.
The rapid collapse in Danish Aerotech’s finances was unexpected, given that the company had entered in to a series of provisional supply agreements with Lockheed, Boeing and the Eurofighter consortium in 2015, all connected to the Danish Fighter Replacement Program (DFRP).
The contract and future revenue-stream value in these Memorandum of Understanding (MoU) agreements, covering the supply of parts and services to the next generation Danish fighter type, was conditional on the outcome of the Danish fighter selection process.
The Danish government is expected to announce its decision on fighter selection in 2016, around about two years later than planned. The Lockheed Martin F-35A, Boeing's F/A-18 Super Hornet and the Eurofighter Typhoon are on the DFRP’s candidate aircraft short-list.
"In terms of modern production capabilities, facilities, orders and potential contracts, there is still a good deal of inherent worth in the business for others to capitalize on," said Jørgensen.
Danish Aerotech has undergone a number of ownership changes since 1999, when the business was bought by DAO Aviation A/S and Scandinavian Avionics A/S from then parent group FLS Aerospace Holding A/S.
Jutlandia A/S, a Danish group with aviation, aerospace and engineering interests, acquired Danish Aerotech in December 2003.
Under Jutlandia’s ownership, Danish Aerotech expanded its operations to include the development and production of electronics components for missile launchers and as well as for military and civilian aircraft such as AWACS, the F16, the Boeing 777 and Boeing 737.
Many of Danish Aerotech’s customers, — including Raytheon, Lockheed, Boeing, Wegmann, Shorts Missile Systems and Pilkington, — are main suppliers to the Danish Defense Forces.
One of the MoUs signed by Danish Aerotech in 2015 was with General Electric, a key partner on the Boeing F/A-18 Super Hornet platform. The agreement, conditional on the outcome of the DFRP, covered future potential aircraft maintenance and overhaul contracts.
Danish Aerotech entered into a similar repair and maintenance MoU agreement with Airbus, which is a core member of the Eurofighter Typhoon consortium.
Among the unrealized contracts is an agreement reached by Danish Aerotech with Boeing in February 2015. This involved the Danish company supplying parts to the cockpit upgrade and modernization module of the NATO aircraft fleet centered Airborne Warning and Control System (AWACS) project for which Boeing is a lead supplier.
In earlier contracts with Boeing, Danish Aerotech had supplied parts to the upgrade of the AWACS Electronic Support Measures sub-system for the NATO, US Air Force and French fleets, as well as launch support structures for the Boeing Harpoon anti-ship weapon system.