Groen Brothers Aviation, Inc. Announces Recapitalization
December 14 2012 - 7:00AM
Marketwired
Groen Brothers Aviation, Inc. (GBA Inc.) (PINKSHEETS: GNBA)
announced today that it has transferred substantially all of its
assets to its subsidiary Groen Brothers Aviation Global, Inc. ("GBA
Global"), while simultaneously substantially all of its creditors
exchanged debt obligations owed by GBA Inc. in the approximate
aggregate amount of $186 million for approximately 87% of the
aggregate outstanding equity in GBA Global. GBA Inc.'s intent to
undertake this transaction was previously announced on Form 8-K
filed on May 2, 2012 and Form 14C filed on May 22, 2012 with the
Securities and Exchange Commission describing the transaction.
As anticipated, the recapitalization will result in the
elimination of substantially all of GBA Inc.'s debt obligations
which, prior to the exchange, was approximately $186 million in the
aggregate. Immediately prior to the transaction, GBA Inc.
transferred all of its assets -- notably all of its technologies,
know-how, and associated patents -- into its newly-formed
wholly-held subsidiary GBA Global, which was formed specifically
for this transaction. GBA Inc. holds approximately 4% of the
outstanding equity interests in GBA Global immediately following
the exchange, with management holding the approximately 9%
balance.
As a result of this transaction, GBA Global becomes the
operating company engaged in the exploitation of gyroplane and
gyrodyne technology developed by GBA Inc., unconstrained by the
debt burden that limited GBA Inc.'s ability to do so. GBA Global
will do business as Groen Brothers Aviation, thus retaining the
'good-will' value of the Groen name in the aerospace industry,
which it has been a member of for more than 26 years. It is
anticipated that GBA Global may also form additional subsidiary
companies and joint venture companies ("JV") wherein GBA developed
technologies will be utilized and significant additional funding
may be raised in those companies to complete the commercialization
of GBA Global's Civil and Military technologies, both manned and
unmanned. The first of such companies is a civil joint venture,
announced on Form 8-K filed on July 26, 2012, which anticipates
developing an Aviation Industrial Park and aircraft manufacturing
facility under an agreement with Wuhai, Inner Mongolia Autonomous
Region, P.R. China, with the GBA Global JV as anchor tenant.
GBA Inc. itself will become a "non-operating" entity that, as of
the date of the transaction, will derive its revenue and value from
its interest in GBA Global, enabling GBA's common shareholders to
retain a stake in the continued development of GBA technology. Both
GBA Inc. and GBA Global will share the same facilities in Salt Lake
City, UT as their respective headquarters. GBA Global is, however,
taking on GBA Inc.'s website www.groenbros.com, while GBA Inc. has
a new website www.groenbros-public.com, where information related
to its Public Company status and stock symbol "GNBA" may be found.
As a private company, GBA Global's shares will not be quoted on any
stock exchange.
David Groen and Robin Wilson, currently the Board members of GBA
Inc., will continue in those roles at GBA Inc. with Mr. Groen as
Chairman, President and CEO and Mr. Wilson as EVP & COO.
David Groen commented on the success of the recapitalization of
Groen Brothers Aviation: "It has been a long hard push with many
ups and downs -- great highs include: flight of the world's first
turbine engine powered gyroplane and flying the Hawk 4 Gyroplane
for critical security during the 2002 Salt Lake Winter Olympic
Games, to name just a few; and painful lows: two major layoffs and
the loss to cancer of my brother Jay. We look forward with great
excitement to the proper commercialization of these amazing
technologies we've worked so long and at such great cost to
develop."
About Groen Brothers Aviation
Groen Brothers Aviation has been developing gyroplane technology
since 1986 and is recognized as a leading authority on sustained
autorotative flight. Powered by a Rolls-Royce gas turbine engine,
GBA developed the world's first commercially viable modern
gyroplane -- the first "autogiro" to utilize a jet engine -- the
Hawk 4 Gyroplane. The Hawk 4 was used extensively for security
aerial patrol missions during the 2002 Winter Olympics in Salt Lake
City.
As announced on July 26, 2012, the Wuhai Aviation Industrial
Park with anchor tenant GBA Global JV anticipates including 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, it is
anticipated that there 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.
Further information about Groen Brothers Aviation, its products,
and individual members of the GBA Team is available on its web site
at: www.groenbros.com.
Safe Harbor Statement/Forward-Looking
Information Disclaimer
Certain statements in the news release by Groen Brothers
Aviation are forward-looking within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
information is subject to risk and uncertainty. Certain statements
in this Press Release may contain forward-looking information that
involves risk and uncertainty, including but not limited to, the
Company's ability to fund ongoing operations and to complete its
obligations under the government contract and its other ongoing
commitments. Future results and trends depend on a variety of
factors, including the Company's successful execution of internal
performance plans and agreements; product development and
performance; risks associated with regulatory certifications of the
Company's commercial aircraft by U.S. and foreign governments;
government bid and funding availability uncertainty; other
regulatory uncertainties; performance issues with key suppliers and
subcontractors; governmental export and import policies; and the
ability to adequately finance operations including meeting its debt
obligations, fund manufacturing and delivery of products.
FOR FURTHER INFORMATION Hank Parry/Media Al Waddill/Investor
Information Groen Brothers Aviation, Inc. 801/973-0177