$6m price tag lower than expected (600 words)

Published: 12/11/2000

It appear the saga of the stranded An-124-100 at Maastricht in the Netherlands and previously owned by the defunct Russian operator Ajax Cargo Airlines, may be at an end with the sale of the aircraft to the UK's Air Foyle for $6m in a second auction after the original bid was postponed in August due to creditor objections to the auction procedures. The price of the deal however, was considerably lower than expected, with pre auction estimates putting the value of the aircraft in excess of $15m, with considerable interest from 8 possible bidders paying the $25,000 deposit required to participate in the auction, according to R. Marinus of auctioneers Meerman. By the deadline for the auction however, only three bids were submitted, one from the UK in the form of Air Foyle and two unnamed Russian bids for $15m and $400,000 respectively. The highest bidder, who Marinus declined to name, had their bid disallowed due to a breech of the procedures governing the auction process. According to Marinus all bidders who had registered for the auction in August were given a unique identification number, these were used when the bidding documentation for the December auction was sent to registered bidders. When the unnamed Russian company bid $15m for the aircraft however, there was a different company name on the bid form, than that registered with the unique identification number and the bid was disallowed and the bidder informed that new entity would have to register, which apparently it did not. Both Volga Dnepr and Heavy Lift, their UK based partners, with whom they have recently extended their marketing agreement for a further 5 years, acknowledge that they bid in the auction, but will not confirm that they were the $15m bidder. For Air Foyle, the deal may have come as something of a surprise given the level of their bid. According to the company they have not undertaken an extensive evaluation of the aircraft or received the aircraft's technical documentation. They will therefore be sending a team in the near future to examine the aircraft and establish the work required to get it airworthy and flown Maastricht to Kiev; where it will undergo an extensive overhaul and re-certification, before being put into service with a Ukrainian registration under the management of Air Foyle's partners Antonov Airlines. For the foreseeable future according to Air Foyle, the aircraft will remain in Air Foyle's ownership. Sources however, have suggested that it may be transferred to Antonov at some point, given earlier speculation regarding the security of title for the aircraft when registered within the Russia and the CIS, when certain creditors have expressed their unhappiness with the process of the aircraft's disposal. According to Vince Seeger of Heavy Lift from their own survey of the aircraft, the costs and time involved in bringing the aircraft back into service could be considerable. Costs that are likely to dwarf the figure of almost $1.5m paid by Air Foyle to Maastricht Airport for the parking and maintenance of the aircraft over the last three years. The proceeds of the sale of the aircraft will be used to split between the respective creditors by the Dutch courts. The major creditor Imperial Bank will be particularly unhappy given that they had petitioned the Dutch courts to have an open auction at the time of the first auction so as to achieve the highest price for the aircraft. By doing so they cancelled the first auction, which was reported to have received three sealed bids. Their motion was subsequently turned down and the second auction was also conducted with sealed bids.

Article ID: 2242