AHRLAC programme moves into business rescue

Paramount Group’s AHRLAC and Mwari aircraft projects have gone into business rescue, following an application to the South African courts.

A statement from Paramount Group subsidiary Paramount Aerospace Holdings on 4 March said Paramount Aerospace had made an application on 28 February to have Aerospace Development Corporation (ADC), which has been developing the AHRLAC and Mwari aircraft, to be placed in business rescue. Paramount Aerospace holds a 50% stake in ADC.

ADC, which has been developing the AHRLAC and Mwari aircraft, has gone into business rescue. (IHS Markit/Patrick Allen)

Paramount Aerospace said in a statement that the company “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.

“Paramount Aerospace fully supports the company and we believe very strongly in the programme. We are therefore fully committed to the business rescue process in resolving the issues, injecting new capital and ultimately ensuring the long-term sustainability of the company and the production of the aircraft.”

South African media reported on 3 March that ADC staff had not been paid since January and that the manufacturing facility at Wonderboom Airport had been closed. Paramount Aerospace responded to this in its statement that it was “deeply concerned about the impact on ADC’s employees, families, and creditors. The business rescue practitioner will be supported to raise immediate funding so that the employees and creditors of ADC can be paid.”