Klapmeier seeks control of Cirrus Jet
Alan Klapmeier, chairman of the board at the Cirrus Aircraft, says he’s had a heavy travelling schedule for the past eight weeks, seeking investors to help him gain control of Cirrus’ SF50 Vision program.
“I’ve spoken to more than a hundred potential investors,” Klapmeier said in an interview. “And I’m feeling pretty good about our progress. What’s surprising is that there’s so much money out there for investing. If all you do is read the financial news, it’s all doom and gloom. But that’s not true.”
Klapmeier, who co-founded Cirrus with his brother Dale, has been targeting individual investors who already have an involvement in aviation. In these economic times, he said, large, traditionally oriented investment houses aren’t inclined to finance general aviation because they don’t understand it. His goal is to raise enough capital to convince Cirrus’s majority investor, Kuwait’s Arcapita Ventures investment group, to sell him the Vision project and let him lead a separate company dedicated to manufacturing the SF50 Vision single-engine jet. Meanwhile, Cirrus CEO Brent Wouters, who was brought in to run the company by Arcaptia, said at an event June 26 at the Cirrus Migration (an annual fly-in organized by the Cirrus Owners and Pilots Association) that he “doesn’t see a future for Cirrus without the jet.” At the same time, he said that “in the current capital-restrained world, the board is obligated to seek more funding for the project…and responding to Klapmeier is part of this strategy.”
So far, Cirrus has garnered deposits for 352 Visions, at $100,000 each. That accounts for $35 million, which has been used in testing and designing the Vision. Klapmeier estimated that two more rounds of financing—at $60 million each—would be needed to bring the Vision to market. Merrill Lynch has been serving as financial advisor to the Klapmeier group, and has been negotiating with Arcapita.
Should he be successful, Klapmeier said that he would likely remain on Cirrus’ board of directors, “but probably not as chairman.” He said that much is yet to be determined, in terms of who would take responsibility for the deposits (some depositors are asking for their money back), what will be spent in developing the jet, and how any financial arrangement is ultimately structured. Klapmeier would like to build the jet in Duluth, but wouldn’t rule out another location. He said he would rename the jet and that the name “Aegis” is a current favorite.
June 26, 2009