THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, September 9, 1994 TAG: 9409090560
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 59 lines
Struggling aviation services company Flight International Group Inc. on Wednesday won a Navy maintenance contract worth up to $12 million.
The contract originally had been given to Sentel Corp. of Alexandria in August. But the company was deemed ineligible after a review of the bidding process.
The new contract could be a boon for Newport News-based Flight International, which is restructuring its debts in federal bankruptcy court. It sought Chapter 11 bankruptcy protection from its creditors in February.
The company employs 130 people at its Newport News facility and 30 more in other U.S. locations and in Europe.
``This proves without any question that we are on our way back,'' said David E. Sandlin, who became president and chief executive officer of Flight International in March.
The contract, which starts Oct. 15, involves leasing and maintaining four aircraft to be based at the Naval Air Warfare Center at China Lake, Calif., and the Naval Air Weapons Station at Point Magu, Calif.
The 13 passenger planes will be used to transport government personnel and equipment. The one-year contract worth $2.4 million could be renewed for four more years, raising its value to $12 million.
Best known for using modified business jets to mimic enemy fighters in military training exercises, Flight International is focusing its rebuilding in part on its aircraft maintenance capability, Sandlin said.
``This contract further demonstrates the government's continued faith in Flight International's financial and technical competence,'' Sandlin said.
The new contract award shows how far the company has come since Feb. 1993 when it lost a lucrative $239 million contract to provide services at Naval facility in Pensacola, Fla. At the time, the Navy said it pulled the contract because Flight International had not begun operating at the stipulated starting date.
In the year that ended April 30, Flight International lost $5.5 million on sales of $18 million due in part to interest payments on its heavy debt load and to losses on the sale of some assets, said Wayne Richmon, the firm's chief financial officer.
It since has submitted a reorganization plan to the court that has been approved by a committee of its creditors, Sandlin said. ``We expect to emerge prior to the end of this year,'' he said.
Restructuring enabled the firm to earn a profit of $448,000 on sales of about $3.2 million in the quarter that ended July 31, since it's not paying interest on its debt, Richmon said.
As part of the restructuring, the company's secured creditors agreed to reduce its long-term debt to $9 million from $30 million, Richmon said. Interest payments on that debt won't resume until the company emerges from bankruptcy. MEMO: The Associated Press contributed to this report.
by CNB