Fokker rescue plan within two weeks
Friday 18 August 1995
Fokker, the Dutch aircraft manufacturer, will present a survival plan to the government and to its parent, Daimler Benz Aerospace, within the next two weeks.
The announcement came after the troubled company's shares were temporarily suspended yesterday on the Amsterdam stock exchange until Fokker gave assurances that it could fulfil its financial obligations because of guarantees from Dasa.
The exchange demanded an explanation on the company's balance sheet position and future credit facilities following the record first-half losses of 651m guilders (pounds 257m) reported by Fokker on Tuesday.
The loss slashed shareholders' equity to 50.1m guilders from 711.9m guilders at the end of 1994.
At the same time the company warned that it faced another substantial loss in the second half of this year. Some industry analysts said that Fokker may need as much as 1.5bn guilders from the Dutch government and from Dasa, which owns 51 per cent of the company, to survive.
After the bourse declared itself satisfied with Fokker's response, shares returned from the brief suspension with a small decline to 8 guilders.
Dasa said it would support Fokker in its efforts to resolve its problems. A spokesman said the group was working with the government and the workforce on a solution.
"Naturally we stand by Fokker," he added. But he declined to elaborate on what measures might be taken to try to turn the Dutch subsidiary around.
A spokesman for Fokker said the company was in clear need of fresh capital to tide it over the present difficulties but he also said business was picking up.
"We have sold or leased 42 aircraft so far this year, compared with 50 in the whole of 1994. The problem is not our products. The problem is outside factors, including the weak dollar and falling market prices," he said.
Recent years have seen a process of consolidation involving most of Europe's regional aircraft manufacturers, reducing costs and allowing far more competitive pricing.
The company said that about one third of the loss in the first half of the year was due to currency fluctuations. The company is vulnerable to a weak dollar because most of its costs are in guilders, while its sales revenues are in dollars. The loss of 651m guilders, was the biggest in Fokker's 75-year history and outstripped the most pessimistic forecasts.
Ben van Schaik, Fokker's chairman, yesterday said: "The immediate survival plan, which is in the hands of Fokker, will be on the minister's desk within two weeks and will then be discussed with the minister and Dasa." He added that the German parent would play a crucial role in the medium- and long-term strategy that would be drawn up later.
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