GNBA News Groen Brothers Aviation Announces Major Agreement to Establish Aviation Industrial Park in China
2012-07-26 14:41 ET - News Release
SALT LAKE CITY, UT -- (Marketwire) -- 07/26/12
Groen Brothers Aviation, Inc. ("GBA") (PINKSHEETS: GNBA) is announcing in contemplation of the financial restructuring of the Company, that on July 19, 2012 an agreement was reached between its newly formed wholly owned subsidiary, "Groen Brothers Aviation Corporation" ("GBAC") and The General Office of Wuhai City Government ("WCG"), Inner Mongolia Autonomous Region, P.R. China. Under this agreement, GBAC will form a Joint Venture Company (as described below), to establish a new Wuhai Aviation Industrial Park within the Wuhai Economic Development Zone Low Carbon Industrial Park. The GBAC Joint Venture Company, as the anchor tenant of the Aviation Industrial Park, will also establish a series of modern aircraft manufacturing facilities primarily to produce FAA Type Certified Gyroplanes of GBA's designs and a few carefully chosen fixed wing designs that fit within GBA's standard for highly advanced aircraft. This will include the tandem seating SportHawk and ShadowHawk Gyroplane series, the ArrowHawk Gyroplane series starting at seven seats but subsequently up through 14 seats, and eventually the GBA GyroLiner class VTOL airliner series from 19 seats up to 100 seats. Though the market for these aircraft is expected to be extremely large within China, these aircraft will be produced for worldwide distribution.
The Wuhai Aviation Industrial Park established by the GBAC Joint Venture Company will include full airport facilities capable of properly handling general aviation operations including a runway sufficient in length and size for use by executive business jets up to the Gulfstream sized aircraft. In addition to the manufacturing facilities and airport terminal operations, located within the Wuhai Aviation Industrial Park will be training facilities for aircraft assembly personnel, aircraft "A&P" mechanics training, and both fixed wing and rotor wing pilot training with a pilot center and flying club; a research and development center; a not for profit aviation technology training center; and employee and student housing. GBAC will be responsible for leading the whole of this effort and providing the necessary cadre to ensure its quality and timely completion. WCG will provide up to approximately 2.6 square kilometers of land within the Low Carbon Industrial Park for placement of the Aviation Industrial Park and its associated facilities.
GBA is also announcing that GBAC has entered into a joint venture agreement with ZhongXin Group Ltd. Co. registered in Hong Kong, SAR, China ("Hong Kong ZhongXin,"), a technology investment company. Under this agreement, GBAC and Hong Kong ZhongXin are establishing the Joint Venture Company described above, tentatively named "GBA Aviation Investment Limited" ("GAI-JV"). This Company will be registered in Wuhai City, Inner Mongolia Autonomous Region, P.R. China, with each party holding a 50% share ownership. GBAC will license appropriate "civil" gyroplane technologies to GAI-JV. None of GBAC's military specific technologies will be transferred and the JV company will be restricted to civil aircraft only.
On May 1, GBA filed a Form 8-K, with a copy of its associated Schedule 14C Preliminary Information Statement, which announced that following months of in depth negotiations with all its creditors, most of whom are significant equity holders as well, GBA had reached an agreement for a plan to accomplish a major financial restructuring. That filing also noted that the Company had received a commitment from the holders of a significant majority of voting shares to vote in favor of the restructuring plan; subsequently a majority of votes has been received.
