Singapore, further to an early announcement dated 8th June 2012, Vision Technologies Aerospace Incorporated (VT Aerospace) the U.S. based subsidiary of Singapore Technologies Engineering Ltd (ST Engineering) has received approval from U.S. Bankruptcy Court in the District of Delaware.

The approval covers the acquisition of the Tampa aerospace maintenance facility and certain assets of Pemco World Air Services Inc. (Pemco), including the Boeing 737 freighter conversion Supplemental Type Certificates. This acquisition is subject to regulatory approvals and customary conditions precedent, and is anticipated to close in July 2012 according to ST Engineering.

On March 5, 2012, Pemco, filed chapter 11 petitions for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. According to the Declaration of Pemco's chief financial officer, Pemco describes itself as "an industry leader in maintenance, repair and overhaul for wide and narrow body aircraft and regional jets from around the world."

Pemco's business operations

Pemco provides its maintenance and overall services out of three service facilities located in Tampa, Florida; Dothan, Alabama; and Erlanger Kentucky. At its service facilities, the company provides customers with scheduled and unscheduled maintenance, interior refurbishment, interior and equipment installations as well as equipment repair and upgrades.Going in to bankruptcy, Pemco has 877 employees, approximately 25% of which are represented by the International Association of Machinists and Aerospace Workers AFL-CIO Local 1632.

Pemco's finances

At the time of its filing for bankruptcy, Pemco has approximately $31.8 million in senior secured debt which is held by Avion Services Holdings, LLC (Avion). Avion is an affiliate of Sun Aviation. Sun Aviation is a secured noteholder of Pemco, holding $5.6 million in subordinated secured notes.

Objectives while in bankruptcy

Pemco lists several factors that it attributes to the need to file for bankruptcy. Since 9/11, the airline industry as a whole has been confronted with increased fuel and security costs. These increased costs have forced airlines to reduce airplane overhauls and conversions, which in turn have hurt Pemco's revenues. In response to these challenges, Pemco was able to reduce some of its operating costs, however, it ultimately was unable to generate enough cash flow to satisfy its debt obligations.