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Héroux-Devtek Inc. (“Héroux-Devtek” or the “Corporation”), a leading Canadian manufacturer of aerospace products, has announced a comprehensive capital investment plan (the “Plan”). This Plan will enable Héroux-Devtek to successfully carry out an important long-term contract to supply The Boeing Company (“Boeing”) with complete landing gear systems for the Boeing 777 and 777x aircraft. Under the terms of the contract, deliveries are scheduled to begin in early calendar 2017.
The Plan calls for investments of approximately $90 million directly related to the Boeing contract. These investments, essentially spanning the Corporation’s fiscal years ending on March 31, 2015 and 2016, will include the expansion of the existing facility network as well as investments in leading-edge machinery and equipment for component manufacturing and system assembly. The investments are in addition to planned regular maintenance capital investments currently projected at approximately $30 million over this two-year period.
“Héroux-Devtek is eager to begin executing the largest landing gear contract in its history and this exhaustive Plan brings us another step closer to its achievement. The Plan will leverage the strengths of our existing centres of excellence, while adding manufacturing and assembly capacity that will allow us to provide Boeing with cost-effective products of superior quality. Our expanded network will also build a foundation for Héroux-Devtek to pursue other opportunities to demonstrate its world-class capabilities in producing large-scale, complete landing gear systems,” said Gilles Labbé, president and chief executive officer of Héroux-Devtek.
Financing for the Plan will be secured by the Corporation’s available cash, its existing Credit Facility and new finance leases. The Credit Facility has recently been extended for a three-year period up to March 2019 and its authorized amount has been increased to $200 million with an additional amount of $75 million available, subject to lenders’ consent.
