Raytheon Taking Control of FLOPs!

[Lumber Yak]

I found this on AINOnline today:

Raytheon Co. Taking Control of Flight Options

Kenn Ricci, CEO of Cleveland-based fractional aircraft provider Flight Options, in his weekly voice mail to employees on January 3, said he has spent much time looking for the right financial solution to the company’s difficulties and that now “Raytheon has become that solution.” This message confirms earlier reports that Raytheon Co. of Lexington, Mass., would become the majority shareholder after converting to equity some $20 million in debt Flight Options owes Raytheon. Negotiations are ongoing, said Ricci, adding that as Flight Options’ single largest shareholder, Raytheon “will have significant input as to how we do things.” Raytheon Aircraft and Flight Options merged their fractional operations on March 21 last year, with Raytheon holding 49.9-percent ownership. Since then, according to Raytheon’s third-quarter 2002 report to the Securities and Exchange Commission, Flight Options has been unsuccessful in its pursuit of additional equity financing. In his weekly address, Ricci said Flight Options sold 30,000 hours’ worth of fractional shares last year, compared with 40,000 hours’ worth in 2001. The takeover by Raytheon was also confirmed by Robert Pinkas, a Flight Options board member and managing general partner of investment firm Brantley Partners of Beachwood, Ohio. Pinkas was quoted in Crain’s Business Cleveland, but would not comment on the situation to AIN. Neither Flight Options nor Raytheon Co. returned AIN’s telephone calls.

 

[Gumby]

FLOPS

They killed Kenny?

 

[mike]

No, but it looks like Kenny's need to be number two killed FLOPS.

 

[fracman]

OT - Premier I accident

Ouch!

http://www.listindiario.com/portada/pplana.pdf

 

[Dep676]

That looks like it hurt. I ask though what that has to do with Raytheon taking over FLOPs?

 

[Answerguy]

The tube really held together well in that premeir crash! The wing does not look so good though!

 

[Lumber Yak]

Quick question. If Raytheon now takes control, do the former Travelair pilots get to "rejigger" the seniority list in their favor - now that they are in control (figuratively speaking)? Any former Travelair pilots want to comment? How do you feel about the future of Flight Options? Do you feel more secure now than pre-merger?


Good luck to all!

 

[fracman]

Ricci

I heard Ricci is no longer working from the Cleveland office, can anyone confirm this?

 

[Grim Reaper]

As of today, Jan 10, 2003, Mr. Ricci is still the CEO of Flight Options and Mr. Rossi is the COO. Raytheon Corporate, not Raytheon Aircraft, will become the largest share holder the primary financial backer for aircraft accquisitions and share sales.

There is no doubt that changes will occure. How much and when remain open questions. The former RTA pilots should not expect that future changes will include a re-shuffle of the seniority list nor the return of the Raytheon benifits package.

For those that are beating their chest in glee, do not get too carried away. Do you really think that Mr. Ricci will lose money on this deal even if he is not the CEO of Flight Options post Raytheon assumption of control? Mr. Ricci has sold controlling interest in Flight Options to Raytheon for a price no doubt.

For all Flight Options personnel reading this, remember, people live in the realm of reality, not the realm of expectations. Be prepared to accept reality.

 

[fracman]

I heard John Nahill (sp?) from Raytheon Corporate is taking Ricci's place.

 

[ratings:all]

warm fuzzies?

all this talk doesnt give me any warm fuzzies about thinking of applying to the operations department-any thought on how this would affect the screen-watchers? daddy needs a new pair of shoes ( and the paycheck to buy em)

 

[mike]

The object of this exercise

We can agree on a few points.

First is that Raytheon wanted out of the Fractional Ownership business. That is why they accepted the joint venture proposition and lent the start up funds. It was a means to an end. But, Raytheon was sold a bill of goods. There was no intent on completeing projected sales of aircraft, using Ratheon service centers and FBO's.

Second is that Raytheon realized that their partner was unable to secure financing they got scared. Raytheon is a public company and the joint venture is small, but these things have a habit of becoming large discrepancies on stock anyalisis charts. They must take action to protect the investors.

Third is the fact that Rayhteon still wants out of the Fractional Ownership business. So, at the end of January we will read about Raytheon and FLOPS transfering operational control. Then Raytheon will cut costs, and create what synergy they can through maintenance and FBO services. The business is for sale.

 

[sky4]

Mike?

Mike, you are a Loser and you have no idea what you are talking about! I have seen your post from the past and we know who you are. Why are you posting on things you know nothing about. If you want to spread rumors spread them on your company anyway you want, or I will! In other words, just keep to what you know.

 

[mike]

Did not mean to upset you.

Hey SKY4,

I did not post to upset you. I stated facts that you can read in the Cleveland papers or the financial search engine of your browser. The statements are by Raytheon, Flight Options and private investors (Pinkas).

You are upset, and I am worried about a few friends that work for FLOPS. So, you have a right to be upset. But don't ignore the obvious and qualify the source of your material.

Good luck.

 

[Joe Jet Pilot]

? For Mike

According to your words, your statements are a matter of public record. With that in mind, please provide a link to backup this part of your post:

"Third is the fact that Rayhteon still wants out of the Fractional Ownership business. So, at the end of January we will read about Raytheon and FLOPS transfering operational control. Then Raytheon will cut costs, and create what synergy they can through maintenance and FBO services. The business is for sale."

I would sure like to see it for myself.

 

[Joe Jet Pilot]

Oh Little Mikey!

Still Waiting For Your Response!

 

[mike]

Patience Joe.

Patience Joe, I have got to work for a living. You could do some leg work and find sources that you think are credible. Here are a few items that you may find a good read.

Raytheon third quarter SEC filing on EDGAR. A quick online address is
http://investor.raytheon.com/edgar.cfm
You want the 11/06/02 filing of the SEC 10-Q. There you can read about FLOPS and see that Raytheon’s sale of RAC Engineering has problems too. If you are curious about the structure of the joint venture you can search the other filings.

Raytheon will take over at the end of January – Crain’s Cleveland Business News, “Change in Wings for Flight Options”, January 6, 2003. The on line address is http://crainscleveland.com/article.cms?articled=35105
This article quotes Mr. Robert Pinkas, a Flight Options board member and the managing Director of Beachwood Venture Capital. I don’t claim any knowledge of the management team, but I do know that the must cut costs.

The Business is for sale – Wall Street Journal, summer of 2000. Raytheon sold several elements of Raytheon Aircraft Company (RAC Engineering, Finance & Electronics) during the summer of 2000. The most surprising (most profitable) was the finance arm of RAC to Credit Suisse First Boston. It was reveled in July of 2000 that all of RAC was for sale and that Credit Suisse First Boston was contracted to find a buyer. You will find mention of the possible suitors, Dassault, BAE and General Dynamics. All of the companies wanted parts, but nobody wanted the whole. Thus, Raytheon Aircraft Company has not been sold. I know you want a link that is easy, so try
http://biz.yahoo.com/rb/030113/transport_raytheon_4.html
Pay special attention to the heading “Drag on the Business”. This will tell you why Raytheon is trying to unload RAC and all of its elements.

That’s enough for now. I have got to get back to work.

 

[Answerguy]

Go away Mike. Stop changing the words around. Robert Pinkas said nothing about cutting costs. He did say that his company will continue to invest in Options. Here is the real article.

Change in wings for Flight Options

By JEFF STACKLIN

Flight Options LLC, a Richmond Heights company that sells fractional ownership interests in new and used corporate jets, is about to go through an ownership change itself that could lead to the removal of CEO Kenn Ricci from the pilot's seat.
A majority interest in the company will shift from local investors to Lexington, Mass.-based defense contractor Ray-theon Co., according to Robert Pinkas, a Flight Options board member and managing partner of the Beachwood venture capital firm Brantley Partners.

Raytheon's fractional aviation division, Raytheon Travel Air, merged with Flight Options Inc. last March to form Flight Options LLC. Under the revised ownership arrangement, Raytheon will convert a $20 million debt it is owed by Flight Options LLC to take an increased equity stake in the company, Mr. Pinkas said.

Raytheon currently owns 49% of Flight Options LLC, while the owners of the former Flight Options Inc. hold a 51% stake. Mr. Pinkas said the conversion of the debt will push majority control of the company to Raytheon. However, he said it has not yet been determined what the ownership stakes will be after the transaction is completed by the end of January.

Mr. Pinkas' firm was one of the early investors in Corporate Wings, the company that evolved into Flight Options Inc. Brantley Partners, as well as other previous Flight Options investors, will make new investments in the company, Mr. Pinkas said, though he would not disclose how much money his firm and others will invest.

 

[mike]

That must be the answer

No cut costs. Let me get this right. FLOPS is running red ink and can't get venture capital. Their largest share holder (49%) steps in and converts debt to equity in the joint venture. You don't see cost cuts in their future.

You should run for political office because that logic only works in goverment.

Best of luck.

 

[Grim Reaper]

Mike, I can neither confirm nor deny the financial status of Flight Options. I am sure that you can not either. But we can spread rumors can't we?

There are rumors about that Raytheon will cut cost and sell Flight Options. Question, to who? Current business situation precludes this just as the current business situation precludes the rapid conclusion of union negoiations for all except those that will be liquidated if agreements are not made soon.

Flight Options might be for sale, but then again, everything is always for sale for the right price. That means the job you are sitting on could go away tomorrow if someone got a bug up there butt and made the right offer to your employeer.

As others have stated on this board, I am appalled at the glee displayed by some on this board at what they think is impending doom for over 3000 Flight Options employees.

 

[mike]

I take no pleasure in others pain. My first comment was an observation to the question. I guess the taunt for response made me a little short, and I can regret that flaw in my personality.

You are correct in stating that nobody has security in this awful economic climate. There are alot of guy's who provided excellent service and value for their company, but lost their jobs in 2002.

I sincerely hope this does not happen at Flight Options. And, I do wish them the best of luck.

 

[Grim Reaper]

Mike, thank you for the reply. Time will tell what goes on at Flight Options.