20-Jan-2011 Source: Erickson Air-Crane
In a recent SEC filing, Erickson Air-Crane stated the following:-
On December 6, 2010 we entered into a non-binding memorandum of understanding with Wan Yu Industries Groups, Limited (China Taicang Aircrane Company, Limited) (Taicang) that includes:
The purchase of five S-64F Aircranes by Taicang, which Aircranes will be manufactured at our facility in Central Point, Oregon.
The cooperation with and support of Taicang in developing the capabilities and facilities required for the manufacture, marketing and support of the Aircrane in China.
Support in obtaining the Civil Aviation Administration of China certificate of airworthiness for the Aircranes that are operated in China.
The material terms of the purchase of the five S-64F Aircranes by Taicang were included in a separate agreement signed by both parties on December 8, 2010, as amended December 24, 2010. The obligations of each party under the agreement are conditioned on the payment by Taicang on or before January 31, 2011 of a non-refundable deposit. There is no guarantee that Taicang will make the deposit, however, and we may have no legal recourse, other than termination of the agreement, if Taicang does not make the deposit. The five aircraft are to be delivered over a two year period beginning with the delivery of the first Aircrane February 28, 2011. The agreement specifies that the additional aircraft are to be delivered in the third fiscal quarter of 2011, and the first, second and third fiscal quarters of 2012. The agreement also contains the payment schedule for each aircraft, including advance payments based on the aircraft’s expected delivery date, and terms for pilot and maintenance training, warranties and pricing incentives. We do not anticipate recognizing revenue in connection with this sale agreement in 2010. See “Management’s Discussion and Analysis of Financial Condition and Results of Operationsâ€”Trends and Uncertainties Affecting Our Businessâ€”Aircrane Sales.”