Kestrel CEO: Financing Puzzle Still Coming Together, Not Complete
July 31--PORTLAND, Maine -- Alan Klapmeier, CEO of the startup airplane manufacturer Kestrel said Wednesday the company has secured a new foreign investor that's put some employees back to work at its Brunswick Landing facility, but he declined to share many details.
"As we have funding, we bring people back and say, 'Here's the next thing we need to get done,'" Klapmeier said, noting that fundraising is still an ongoing process as the company seeks to develop a prototype of the all-composite plane it has said will be the fastest single-engine turboprop aircraft. "It's positive news for the company, but it's not big news."
He couldn't confirm the number of employees working this week out of the Brunswick location but said it's "more than there were last week."
Steve Levesque, leading the Brunswick Landing redevelopment as executive director of the Midcoast Regional Redevelopment Authority, said in an email he didn't have any more detail on Kestrel's employees after the latest investment but wrote that it "looks like a good long-term prognosis" for the company and that they are current on their rent payment with MRRA.
The website flightglobal.com first reported that Kestrel secured a new foreign investor and could get its plane to market within three years, based on comments attributed to the company's technical officer, RJ Siegel, Tuesday during the Experimental Aircraft Association conference in Oshkosh, Wisconsin.
Klapmeier said the latest investment doesn't ensure the three-year production schedule, but moves the company closer toward critical stages of development like building and conforming prototypes for the aircraft.
The company's headquarters are in Superior, Wisconsin, where it decided to locate in 2012 after getting a package of loans and tax credits through various state agencies and the federal New Markets Tax Credit program.
Former Gov. John Baldacci and Brunswick Landing officials had previously announced the company would locate its manufacturing headquarters in Brunswick in 2010.
In September 2013, the company was behind on its rent payments in Brunswick and paychecks to about 40 Brunswick employees. Klapmeier told the Wisconsin TV station WDIO in May that delays in financing are pushing back the project schedule and that it was behind on paying a loan from the Wisconsin Economic Development Corp.
Officials from that state agency said they were working out a deal with the company to defer payments to November.
Klapmeier said there is still some question about how much of the project the company will do in Maine and how much will happen in Wisconsin, where Gov. Scott Walker has said the company could create up to 600 jobs.
Since that announcement, the company has not moved forward on its plans to build two construction plants and company and state officials are still ironing out details of the 30-month-old Wisconsin financing package, according to a report earlier this month in Business North.
In total, Klapmeier said that he's seeking to raise between $100 million and $125 million to get the plane designed, built, certified by the FAA and out to market.
"But some of that's easy cash," Klapmeier said, noting that financing to buy radios, propellers, avionics systems and other components will come easier because they will be needed at a later stage of development when the major components of the plane are already completed.
As part of the financing plan to develop what Klapmeier has billed the fastest single-engine turboprop aircraft, made of composites, Klapmeier said the company plans to raise up to $30 million in exchange for equity in the company.
He declined to say how far the company is toward its fundraising goals. He said the process is more complicated than raising one lump sum to support its project.
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