Arista Aviation

Sponsor: BrightWater Partners

Type of QALICB: Operating Company

Owner: BrightWater Holdings

Cty and State: Enterprise, AL

Contact Person: David Sosa

Phone: 773.255.6709

Contact Email: [email protected]

Allocation Amount Requested: $20,000,000

Brief Description of Development:

Arista is an Federal Aviation Administration ( FAA ) approved company that specializes in the sales, lease, rebuild, upgrade and recertification of the full line of Bell medium hull helicopter ( BMH ) and derivative airframes and avionics.  The Company also sells a wide range of helicopter parts and components to customers on a global basis. Arista improves the helicopters  capability and reliability while lowering operating costs and extending aircraft service life for customers that include the U.S. government, defense sub-contractors, foreign countries ( Friends of the U.S. ), state fleets and corporate customers worldwide. Arista was awarded a $120 million contract from the U.S. State Department  to overhaul and repair their fleet of Bell helicopters. 
 
Arista began its Alabama operations in September 2012 to  meet  the growing demand for helicopter  maintenance, repair and overhaul services of the region s military bases as well as those of U.S. government agencies and to service the demanding needs of other large fleet operators globally.
 
Arista is seeking a $20,000,0000 New Markets Tax Credit Financing to provide for equipment purchases and for working capital to finance new and current contracts. The project is expected to generate approximately 130 jobs with average salary of over $24/hour in a rural and highly distressed census tract.

But-For Statement:

Without the support of  a new market tax credit financing, Arista Aviation would not be able to support an investment of this size for the following reasons:
 
1) In order to adequately finance the purchase of equipment and finance the working capital needs for the minimum investment in equipment , inventory and working capital would be approximately $4.5 million.
 
2) Arista s current cash flow of approximately $2.0MM and total current debt of $4.8MM could  support additional debt of approximately $1.2MM vs. the actual additional cash need of $4.8MM. Lenders for companies of Arista s size generally do not lend more than 2-3x cash flow. Initial debt/cash flow to fund the project would be almost 5x existing cash flow which is well above all conventional and no conventional lending standards.
 
3) The purchase order and government receivables nature of the Helicopter MRO business available in Alabama also presents significant challenge for conventional and none conventional lenders to provide debt capital to Arista as such working capital is severely constrained.
 
4) Raising $4.5million of equity to facilitate the Alabama project would also not be feasible as it would result in substantial, unacceptable dilution to the current ownership group 
 
5) Delaying the purchase of  the manufacturing equipment for the new facility and not providing for working capital would mean that current unmet demand will be filled by alternative suppliers, likely outside of the region.

 

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