Quebec open to providing financial support for Aveos
A laid-off Aveo employee is arrested during a demonstration in front of the aircraft maintenance company's plant in Montreal, Tuesday, March 20, 2012. (Ryan Remiorz / THE CANADIAN PRESS)
Published Friday, April 20, 2012 2:03PM EDT
MONTREAL - The Quebec government says it's open to providing financial support for a new owner of the insolvent Aveos aircraft heavy maintenance firm if it's a viable business that sustains jobs in Montreal.
"We will favour a viable business model that permits to create and maintain activities in Montreal," Economic Development Minister Sam Hamad told reporters as a Quebec judge was expected to approve a two-month sales process.
Potential bidders will have until May 29 -- five weeks -- to prepare their offers for Aveos Fleet Performance's three business lines.
Selected bidders will then have about 10 days to finalize their offers and waive any conditions, according to a motion that was being heard Friday in Quebec Superior Court by Justice Mark Schrager.
Hamad wouldn't specify what kind of financial support the Liberal government was considering. But he said the priority is to maintain jobs and ensure a long-term solution is reached.
"Taxpayers won't pay for nothing. There will be financial returns in Quebec, there will be jobs in Montreal. That's what is important."
The minister added the government won't replace the private companies that are considering bids.
Some 23 potential bidders have expressed an interest in acquiring some or all of the Montreal-based company's assets.
Aveos, which had been Air Canada's (TSX:AC.B) largest aircraft repair and overhaul provider, laid off more than 2,600 employees across the country March 20 when it ceased operations.
In addition to having solid financing, potential buyers need to provide details on the proposed number of unionized and non-union employees it will have.
Germany-based Lufthansa Tecknik is expected to be among the leading bidders. The company's subsidiaries employ 26,500 workers and serve 750 clients around the world.
A committee representing the city of Montreal, the provincial department, Investissement Quebec and the Quebec Federation of Labour Solidarity Fund are working to help relaunch Aveos' activities.
Air Canada has committed to collaborate with the process.
Potential bidders will be required in the first phase to provide proof of "firm, irrevocable commitment for financing."
They will also have to provide "sufficient details of the proposed number of employees (union and non-union) of Aveos who will become employees" of the bidders.
A short-list of bidders will be selected by June 1. They will then have to provide a timeline to restart operation, any arrangements with the International Association of Machinists and Aerospace Workers, government support and involvement of Air Canada and other major Aveos customers.
Bidders will be given access to a "virtual data room" to conduct due diligence and may tour facilities and meet with Aveos management.
Deposits will be required but will be returned to companies that don't make the short list.