April 25, 2008
By Thomas A. Horne
After three years of investigation, suspicions about the financial health of Thielert Aircraft Engines (TAE) have culminated with the company’s filing for bankruptcy, the termination of founder Frank Thielert as chief operating officer, and a renewed criminal investigation against both Thielert and management board members.
At issue is an “urgent liquidity crisis,” according to a detailed report in Defense Industry Daily. The nature of the crisis has various explanations.
While TAE has appeared to be a successful company, having bought Texas engine manufacturer Superior Air Parts, secured deals with American unmanned aerial vehicle (UAV) manufacturers, and recently signed on to supply Cessna Aircraft with its 2.0-liter Centurion turbodiesel engines for its 172 Skyhawk line of piston singles, the company’s burn rate (negative cash flow) had raised suspicions since 2005.
TAE explains by alleging that there are millions of dollars’ worth of unpaid invoices for deliveries of its UAV engines to General Atomics, Northrop Grumman, and Lockheed Martin. Those companies deny the charges. A 2006 auditor’s complaint to a Hamburg, Germany, prosecutor accused TAE of writing false invoices for fictitious sales in a scheme designed to pump up share prices and secure loans. That started an investigation of TAE on charges of fraud and providing false evidence. In 2007, search warrants were executed at TAE offices and Frank Thielert’s home.
In March 2008, a German court declared TAE’s 2003, 2004, and 2005 annual reports to be void. An April 8, 2008, arrangement to restructure and refinance TAE fell through. That deal would have raised 13.6 million euros (about $21 million) from sales of Frank Thielert’s own shares in TAE, bank credit lines, and an initial public offering of 24.4 million euros ($38 million). But after a criminal investigation, the deal was terminated and Frank Thielert and his CFO were fired on April 23.
The following day, TAE declared bankruptcy. It is presumed that a court in Chemnitz, Germany—near TAE’s factory in the state of Saxony—will appoint a managing director who will supervise a rescue plan.
Meanwhile, sources at TAE in Germany say that the company is still shipping engines and parts, and that no layoffs are anticipated. The bankruptcy will undoubtedly change the landscape of the general aviation diesel-engine movement. Diamond Aircraft is expected to announce production of its own turbodiesel engine at next month’s ILA convention in Berlin, and it’s expected that Lycoming will develop its own general aviation turbodiesel in the near future.
April 25, 2008
AOPA and the Massachusetts Airport Management Association defeat an effort to cut $34 million from the Massachusetts transportation bond bill.
Engine overhauler Penn Yan Aero announced that it is extending the warranties on overhauled and experimental aircraft engines, effective immediately.
Dinners at Waypoint Café at California's Camarillo Airport will have an outside dining option to watch airplanes and helicopters take off and land, and learn more about general aviation in the process.
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