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Commander Premier sold to Canadian company
The man who wants to revive the fortunes of Commander Premier Aircraft Corp. said Tuesday he not only wants the building housing the business but has his eye on additional land at the Cape Girardeau Regional Airport.
Ronald Strauss of Montreal, Canada, is a 68-year-old former banker. On Monday, Commander's board of directors approved a letter of intent to sell the business to Aero-Base Inc., Strauss' Canadian-incorporated company. In a news release detailing the sale, Commander said Aero-Base must arrange acceptable terms for the 52,000-square-foot production facility at the airport.
In a telephone interview, Strauss said he doesn't see a problem with coming to terms with the city. "I was impressed by the way that the discussions I had with the mayor and the council went, and the airfield and the hangar and the premises. There is land available for expansion, and all of those made me make the decision to keep the company in Cape Girardeau."
Commander Premier was formed in 2005 by 50 owners of Commander airplanes. They purchased the stock of parts and the name from the bankrupt company that developed Commander models and brought the business to Cape Girardeau promising to build more airplanes. The company was given a production building at the airport rent-free for six months, with payments then escalating over several years until the rent equaled the city's bond payments on the debt that financed construction.
Delays in gaining FAA approvals and lack of financing meant that no new airplanes were ever made. The company owes the city $491,500 in back rent and has not made a payment since December 2007. Commander employs a handful of people repairing existing airplanes.
The sale announcement caught Mayor Jay Knudtson by surprise. Knudtson, who has been negotiating with Strauss over the production facility, said the move makes him feel better about a potential deal. "He has done everything he said he was going to do so far, and this press release continues to validate his position," Knudtson said. "I have looked at this man and his way of doing business and said, 'This is too good to be true.'"
Strauss said he held several positions in Europe for Citibank and Chase, including vice president of foreign operations at Citibank, during a 32-year banking career that ended in 1999. He did not identify the last bank where he worked other than to say it was a private bank in Switzerland.
If the city can sell the production building to Strauss, it will relieve taxpayers of about $2.2 million in debt on bonds used to finance construction. Knudtson has said recovering the back rent is unlikely.
Strauss would be the fourth airplane manufacturer to attempt to make Cape Girardeau its home. The production building was originally constructed for a company called Renaissance Air.
Strauss has provided the documentation that he has the financing necessary for the deal, Knudtson said.
"At the end of the day, all I am really concerned about is that he has the financial capacity to follow through on our agreement," Knudtson said. "That will be known by the end of August."
As part of the deal, the news release said, several major Commander Premier creditors will accept discounted payments for their debt. Without the creditor concessions, the release said, Commander Premier might pay all indebtedness but there would be little left for a stockholder payout.
The deal is expected to be finalized by Aug. 15, based on the demands of one creditor, South Burlington, Vt.-based Aerodyme Corp. Aerodyme, one of Commander's original stockholders, owns an FAA Supplemental Type Certificate to replace original Commander engines with larger, 320-horsepower engines. Aerodyme has agreed to accept the discounted payoff as long as arrangements for payment were made by Aug. 15.
Strauss said his plan is to also acquire other aircraft companies and combine them into one entity. He would not identify which companies.
He also said he is a pilot and expects an economic recovery to be underway by the time new Commander models are being built in Cape Girardeau. The average private airplane is 25 to 30 years old, he said. "These planes have to be replaced and the market is growing and has been growing, so there is a need for those planes on the market. It is just the timing that might be an issue."
Cape Girardeau Regional Airport, Cape Girardeau, MO