Business

Winnipeg Free Press - PRINT EDITION

Aveos sale 'fishy,' says losing bidder

By: Ross Marowits

Posted: 08/23/2012 1:00 AM | Comments: 0

MONTREAL -- The liquidation of Aveos' engine-repair business resulted in last-minute negotiations that were "fishy" and unprofessional, a vice-president of the losing bidder told court Wednesday.

The chief restructuring officer overseeing the sale encouraged the two German bidders to increase their offers in the days after the deadline for bids closed.

Lufthansa Technik ultimately tripled its original offer, while MTU Aero Engines refused.

"If I knew I was in a Turkish bazaar, I wouldn't have put my best foot forward. I feel like a fool," Juergen Kuhn, the head of business development for MTU, testified.

MTU and the union representing former Aveos employees challenged the transparency and fairness of the process that led to Lufthansa being the recommended buyer.

But chief restructuring officer Jonathan Solursh insisted the process was fair and negotiations were always included in the rules of the game conveyed to bidders.

In fact, he told the court he favoured MTU's job-creating plan but had to accept a higher offer from Lufthansa Technik.

"Personally I liked the MTU story," he said, referring to MTU's plans to hire more than 130 workers, including former Aveos employees, in Montreal and Vancouver.

Solursh said Lufthansa's decision to triple its bid -- to about double what MTU offered -- made the decision clear for him.

"The gap is so big, it's so obvious who the winner of the contract is," he said.

The value of the winning bid hasn't been disclosed but MTU valued its offer at $5.2 million, which included $4 million plus the acquisition of specialized tools from Aveos.

Aveos was Air Canada's main provider of aircraft overhauls and heavy maintenance.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition August 23, 2012 B7

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