A Middle Eastern financial firm has thrown a lifeline to cash-starved Diamond Aircraft in a deal that not only saves the company from potentially going out of business but also allows it to proceed with development of its D-Jet, a five-seat, single-engine VLJ.
Medrar Financial Group in Dubai, United Arab Emirates, snapped up a majority stake in Diamond in a deal disclosed on Monday. “Medrar will ensure the company’s capital needs are met and Diamond continues to lead the industry with emphasis on enhancing the D-Jet’s market status,” said Jamil Marmarchi, CEO of Medrar, in a press release. “We are excited not only by the D-Jet, but also by the derivative models to follow.”
After failing to secure a new development loan from the Canadian government earlier this year, Diamond suspended the D-Jet program and laid off 200 employees who were developing the single-engine jet at the company’s London, Ontario, factory. Diamond subsequently secured financing to restart the program, but withdrew participation from all major North American aviation shows to cut costs.
“It will greatly strengthen our worldwide position to have a capable partner supporting our future growth and our existing business,” said Diamond Group chairman Christian Dries of the deal. “We are pleased that Medrar has demonstrated their recognition of this potential with their significant commitment. We look forward to working seamlessly together to develop the Diamond brand and enhance its value.”
Little is known at this point about Medrar Financial Group. The firm’s CEO is also listed as chairman of RSY Contracting and Engineering Services, founder of Kulacom Broadband Investment Company and a former executive vice president at Merrill Lynch International Bank. Terms of the deal, which also include Diamond’s entire piston aircraft line, were not disclosed.