Buyer found for insolvent Springer Aerospace, would keep Sault Ste. Marie business operating
Buyer found for insolvent Springer Aerospace, would keep Sault Ste. Marie business operating
Pending court and debtor approval, a buyer has been found for Springer Aerospace in Sault Ste. Marie, which declared insolvency late last year.
Springer CEO Christopher Grant said in a March 29 affidavit that the buyer intends to carry on business as usual, should the offer be accepted.
“The potential transaction pursued contemplates the sale of the applicants’ business as a going concern, with current management continuing to participate in the business going forward,” Grant said.
“The transaction is expected to be structured in a manner that results in minimal disruption to employees and customers.”
Based in Echo Bay, near Sault Ste. Marie, Springer is an aircraft maintenance company that has operated since 1972 and employs about 100 people.
It occupies about 210 acres and includes three hangers and an airport that includes a main runway that is large enough to accommodate Boeing 737s for landing and takeoff.
The business was hard hit by the COVID-19 pandemic, which largely shut down the airline industry for an extended period.
With the aviation industry shut down, revenues tanked and the company’s inability to make their debt payments alarmed Caisse Desjardins Ontario Credit Union Inc., the company’s primary lender.
The company had undergone an expansion prior to the pandemic that wasn’t properly planned, court documents said, and it also saw an exodus of senior staff.
Debts piled up and totalled $5.7 million by July 2022. By November, the company had just $1,400 in its bank account and filed for insolvency protection under the Companies’ Creditors Arrangement Act (CCAA).
According to court documents, terms of the sale have been finalized with the undisclosed buyer. The buyer is now in talks with Desjardins and other debtors “to ensure that conditions can be satisfied or waived and the transaction closed in a timely manner.”
“It is expected that the sale proceeds will be sufficient to satisfy the applicants’ priority payables as well as a significant portion of Desjardins’ outstanding liabilities,” the court document said.
“The transaction, if approved, will allow the business to continue with a clean balance sheet, preserve employment, and ensure that work will continue in the normal course on customer aircraft.”
The company received court approval to extend the restructuring deadline to April 11 to allow the sale to be finalized.
Springer is one of the few full-service aircraft maintenance, repair and overhaul businesses in Canada, and the only one located in northern Ontario.
Springer’s customers include airlines, corporations, and private individuals. The company’s facilities comprise state-of-the-art hangars as well as an airport and runways with the capability to accommodate aircraft as large as a Boeing 737s. Before it found a buyer, Springer received court approval to offer bonuses to certain key staff if they remained with the company. That was an attempt to stop the exit of employees that began after the CCAA process began.
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