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Insolvent Echo Bay aircraft refurbisher could have new owners by spring

International purchasers have expressed interest in acquiring Springer Aerospace
Springer Aerospace offers maintenance, repair and overhaul (MRO) services from its facility east of Sault Ste. Marie.

 April 3 is being proposed as a target date for finding new ownership for troubled Springer Aerospace Holdings Ltd.

 A sale and investment solicitation process (SISP) to be presented by the company to an Ontario Superior Court judge on Thursday suggests March 7, 2023 as the final deadline for bids for the Echo Bay maintenance, repair and overhaul business.

If the SISP proposal is accepted, selection of a successful bidder would occur on March 13, with court approval to follow the week of March 27.

Deadline for closing an ownership deal would be April 3, although the company would be able to stretch the timeline up to two weeks with approval from the court-appointed monitor overseeing Springer's insolvency proceedings.

As SooToday has previously reported, Springer was granted protection from its creditors on Nov. 23 under the Companies' Creditors Arrangement Act.

Under newly appointed chief restructuring officer Patrick Walsh, the firm is now rolling down two parallel runways.

One would result in a restructuring to improve Springer's operations.

The other would lead to a sale of the business, or addition of new investors.

Justice Michael A. Penny will be asked on Thursday to approve using electronic messaging to solicit interest in buying or refinancing the company.

"Given the unique and specialized nature of the company's business, I believe that the SISP should generate considerable interest from various parties who wish to invest in, refinance or purchase the company's business or assets," says Walsh, a turnaround specialist based in Toronto and Manhattan.

"Although the company has never previously conducted a formal marketing of the business or the assets, the company has been in communication with several interested parties (including international purchasers), which parties will be encouraged to participate in the SISP," Walsh said in an affidavit sworn Sunday.

"Although the company, in consultation with its advisors, is in the process of evaluating a number of strategic initiatives to improve its operations and financial position, the company requires a comprehensive restructuring transaction (in the form of an investment, refinancing or sale of the company's business/assets) to complement these efforts and to sustain the company for the long-term."

"As a major northern Ontario employer, the company's value to the northern Ontario economy is greater than just its liquidation value. In particular, Springer is the second largest employer in the region after the Algoma Steel mill in Sault Ste. Marie, and provides stable, skilled employment to approximately 100 employees."

"In addition, a large percentage of Springer’s customers service the northern Ontario region by providing air transport for individuals, delivery of food, fuel and medical supplies, as well as air ambulance services to the most remote areas of northern Ontario, including most of the fly-in and Indigenous communities."

"Given this, I anticipate that there may be community interest in the northern Ontario region to invest in the company to preserve employment and the aircraft services that are vital to the fly-in and Indigenous communities in the region," Walsh said.

In a separate affidavit, Christopher Grant, Springer's chief executive officer, said: "I believe that a formal SISP will likely result in interest by various parties, including for instance certain of Springer’s customers looking to vertically integrate, or other aerospace or MRO [maintenance, repair and overhaul] corporations."

"Given the specialized nature of Springer’s business," Grant said, "international purchasers have shown interest."

"I am also aware of certain employees who have expressed interest in investing in the company."

- SooToday