US aviation player explores Lufthansa Technik takeover

UNA McCAFFREY

Lufthansa Technik is in early discussions with US aviation specialist Cloud Investment Partners about a possible takeover of its Dublin aircraft maintenance facility, which is threatened with closure. Irishman Declan Treacy, a former GPA executive, is among the founding partners of Cloud Investment.

The exploratory talks come at a crucial time for the 400 employees at the Lufthansa Technik Airmotive plant in Rathcoole, where Lufthansa Technik is thought to be laying the ground work for a closure around the middle of next year if no other solution can be reached.

"We would be interested," said Mr Treacy from Florida yesterday. He said the company had not yet discussed the matter with IDA Ireland but was close to signing a non-disclosure agreement with Lufthansa Technik. This would give Cloud Investment access to LTAI's financial data, allowing it to make a decision on whether to proceed with an offer or not. Mr Treacy said Cloud Investment's partners have experience of buying and turning around a comparable facility in the Czech Republic. Any deal with LTAI would probably involve retaining the plant's repair, maintenance and testing facilities, he added, emphasising that Cloud Investment's interest was "so preliminary".

It has meanwhile emerged that if LTAI proceeds to closure, it is likely one-fifth of its staff will leave the company in January, with the remainder exiting until June. The company is thought to be preparing redundancy terms that would apply in the event of closure, with this likely to be presented to union representatives late next week.

LTAI said on November 15th it was considering closing the plant and would begin a 30-day consultation process with its staff. The company yesterday confirmed the employee negotiations were continuing, with talks now adjourned until next week. It said it continued to seek "an alternative solution". "To this end, discussions are still ongoing with IDA Ireland, Lufthansa Technik in Hamburg, and at least one outside third party" the company told The Irish Times. IDA Ireland did not comment yesterday.

When signalling the possible closure of the plant a fortnight ago, LTAI pointed to declining revenues and shrinking market opportunities.