Private equity-backed airline manufacturer Fairchild Dornier has filed for insolvency following difficulty finding a strategic partner to help it overcome the aerospace sector slow-down and to fund its new projects. The regional government in Munich and the federal government in Berlin are said to have guaranteed bank credits to keep the Bavarian-based business afloat while it seeks a business partner. Creditor banks have agreed to lend a $20 million advance out of a possible $90 million, according to the company’s insolvency administrator, Schultze & Braun.
The collapse of the business will hit original investors Clayton Dubilier & Rice and Allianz Capital Partners who acquired Fairchild in April 2000 in a transaction valued at around $1.2 billion. The funding was used for the manufacturing of new generation aircraft which involved huge development costs. The company has offices in the US and Germany and the future of around 3,500 jobs depends on the ailing business finding a strategic investor.