Newspaper article THE JOURNAL RECORD

Oct. 9 Meeting Set to Determine Fate of Avacelle

Newspaper article THE JOURNAL RECORD

Oct. 9 Meeting Set to Determine Fate of Avacelle

Article excerpt

Journal Record Staff Reporter Directors of Avacelle Inc., 6912 S. Bryant Ave., are to meet in Dallas 9 to determine the fate of the struggling company, President A.B.

Stewart said Thursday.

Prime concern on the agenda will be to find alternative financing for the company, which plans to manufacture a jet engine muffler for Boeing 707-300 airplanes. The company nearly closed Aug. 30 when the prime financial backer withdrew his support and forced the layoff of about 70 employees.

Avacelle still has a "cadre of about 10 employees" keeping the headquarters and manufacturing plant open, waiting to see if additional financing can be arranged.

"Our target is to be up and running again as soon after Oct. 9 as we can," Stewart said. "We might discuss some forms of alternative financing (at the board meeting) or determine to go ahead with number one (the first muffler nacelle) and start a flight test program without waiting for financing.

"At least that way we'd have something put on an airplane, and we could start our flight test program within our basic framework and get on with the program." The company does not own an airplane to begin a flight test program designed to lead to a supplement-type certificate from the Federal Aviation Administration, which is required for major modification of airplanes.

However, an airplane has been located, and negotiations are continuing for Avacelle to acquire it, Stewart said.

Although the cash-strapped company is struggling at this point, Stewart said it will not default on a $3 million bond-backed loan from the Oklahoma Development Finance Authority.

"We don't plan or expect to default on anything we have out now," he said.

But company officials are negotiating the upcoming payment with officials of the state agency, Stewart said. He did not indicate what those negotiations involved.

Completion of the first set of four nacelles, expected to sell for about $6 million, will require about four more months, with an additional six to eight months flight testing before a certificate can be issued. …

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