Primus Aero GmbH, a company specialising in aircraft management and technical services based in Feldkirchen near Graz, is facing considerable financial difficulties.
Originally, the company's focus was on the administration and management of aircraft as well as various technical and support services. However, Primus Aero now generates around 70 percent of its revenue through the trade in aircraft spare parts. This development and the extensive service contracts with aircraft operators have given the company a strong market position.
Despite this positive market position, Primus Aero had to apply for a restructuring procedure without self-administration in 2023. The KSV1870 (Credit Protection Association of 1870) reports that the expansion of the business area through the acquisition of the Austrian Aircraft Corporation (AAC) in 2022 and the simultaneous expansion of the structures as well as the move to a new office building led to considerable financial burdens
Expansion and challenges
The purchase of AAC GmbH for EUR 3,3 million, of which EUR 800.000 was financed from short-term working capital, was intended to expand Primus Aero's value chain. The remaining EUR 2,5 million was deferred by the seller, but the planned refinancing could not be implemented as planned. These financial burdens were exacerbated by the growth plans of the main customer, who announced the takeover of an airline and the introduction of five Embraer 190 jets into the fleet. However, these plans were not realized, which led to a lack of expected orders and further worsened the company's financial situation.
To stabilize cash flow, Primus Aero resorted to factoring outgoing invoices, which led to an improvement in liquidity in mid-2023. However, the bank reduced the assignment limit to just EUR 100.000, which severely limited the company's financial flexibility. Since November 2023, the main customer has only met its payment obligations irregularly, which put Primus Aero itself in financial difficulties. The factoring contract was finally terminated in February 2024 due to the main customer's poor payment morale. An application to increase the assignment limit was rejected by the bank due to deteriorating financial figures, which further aggravated the liquidity situation.
Current situation and future prospects
With liabilities of EUR 6,014 million and assets of just EUR 2,018 million, Primus Aero GmbH is currently unable to continue operations without restructuring measures. The company had to stop payments and became insolvent. Despite intensive efforts, the necessary financial resources could not be secured, and even sales from franchise agreements in January 2024 could not sustainably ease the situation.
The future of Primus Aero GmbH now depends on the successful implementation of the restructuring and transformation concept. The continuation of business operations and securing the jobs of the almost 100 employees are the primary goals. It remains to be seen how the company will develop under these difficult conditions and whether the measures being pursued will bring the desired success.
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