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Paramount Applies for Business Rescue for ADC

AHRLAC Under Threat

A little over a year ago, MONCh reported the launch of the BRONCO II for the US market, based on the push propeller Advanced High-Performance Reconnaissance Light Aircraft (AHRLAC) being developed by Ahrlac Holdings, now the Aerospace Development Corporation (ADC). (see here for original story https://monch.com/mpg/news/air/2892-bronco-ii-launched-for-us-market.html)

On 28 February, according to press reports in South Africa, Paramount Aerospace Holdings, which holds a 50% stake in ADC (the other 50% being held by the Potgieter family), applied for ADC to be granted ‘business rescue’ status. On 4 March, Paramount released a statement in which it said “Paramount Aerospace has been engaged for more than five months in intense negotiations between the shareholders of ADC, in order to ensure the sustainability of the company; the Board has reached deadlock. Despite Paramount’s best efforts to resolve the deadlock and to inject new capital into the business, the shareholders unfortunately could not reach an agreement.”

Earlier reportage on the project made much of the investment being made in creating and maintaining corporate capability in as many stages of the design, development and manufacturing process as possible – thus ramping up the scale of investment required. Paramount has been the launch (and so far only) customer for AHRLAC, but has apparently yet to receive an aircraft. Reports indicate that ADC has sent its employees home – unconfirmed reports state they have not been paid since the turn of the year – and that significant differences between the shareholders revolve around accusation and counter-accusation of mishandling of intellectual property and differences regarding funding commitments.

Privately-owned Paramount maintains it has provided and underwritten third party funding of significant amounts for ADC and that it will continue to support what it describes as “a truly unique global aerospace product.” It remains to be seen as to whether the business rescue application will succeed, since it seems legal representatives for the Potgieters expect the application to be dismissed as early as this week.

AHRLAC was conceived as a simple but effective and lower-cost alternative to unmanned aerial systems (UAS) for the reconnaissance and light strike roles.

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Publish date

03/05/2019

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