Business: The Prague Post Online

State to sell stake in Let Kunovice

By Jiri Kominek

Let Kunovice's programs -- including its troubled twin-engine commercial transport plane project -- could take off with government approval of the financially crippled aircraft maker's sale to Ayres Corporation.

As part of the $4.5 million (153 million Kc) deal, approved April 22, U.S. aerospace firm Ayres will assume Let's whopping $50 million debt, mainly consisting of current bank loans. Ayres also is expected to invest an additional $15 million during the first phase of its acquisition of a 93 percent stake in Let from the government.

The sale will relieve the government of cash-strapped Let, seen by many as a financial black hole.

"A great burden has been lifted from our shoulders," said Daniel Castvaj, spokesman for the Industry and Trade Ministry. "This was probably one of the last, if not the last opportunity, to save Let."

The government expects Let to shed all its debt by 2002.

"It's a step forward and marks an important starting point to getting the company back on track," said Let CEO Zdenek Pernica.

Let should complete negotiations with Ayres by May, Pernica said, and the government's approval will go a long way in helping seal the deal.

All current product programs should go forward, Pernica said, including the continued development and certification of Let's new L-610 twin-engine commercial transport plane.

Let has tried lifting the L-610 program off the ground since the mid-1980s, but cash problems have stalled it. "We expect that Ayres will accelerate certification of the L-610 and help market the plane around the world," Pernica said.

Ayres, known as a successful maker of crop dusters, has offices in 77 countries.

Let also hopes Ayres will help revive sales of its popular and rugged L-410, a smaller cousin of the L-610. Over 1,000 L-410s have rolled off the assembly line in Kunovice since 1969, when the plane first took to the skies.

Aside from the L-610 program, Pernica said Let now can look forward to making wings and other key components for Ayres's new LM200 Loadmaster cargo plane, which should start rolling off the assembly line later this year.

Ayres already has a launch customer for the project: U.S. courier firm Federal Express.

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