Boeing is expected to be the new owner of Wellington TECT plant
by Tracy McCue, Sumner Newscow — TECT Aerospace in Kansas, an aerospace supply company with a plant in Wellington, appears to have been purchased by Boeing Co.
Boeing Co. agreed to acquire the Kansas assets of its bankruptcy supplier, TECT Aerospac Group Houldings Inc, after winning an auction bid worth nearly $20 million.
Wellington TECT plant employees expect to be meeting with a representative from Boeing today. The announcement of the pending sale also affects the plant in Park City. The company manufactures flight controls, doors, wings, landing gear, cockpits, and other civilian and military aircraft parts. It is considered one of Wellington’s biggest employers.
Kansas Aerospace Manufacturing LLC, a wholly-owned Boeing subsidiary, offered to pay $500,00 in cash, plus $13.5 million in secured debt forgiveness and the creation of a $5.84 million fund to cover assumed liabilities.
The purchase agreement was filed on July 2 with the U.S. Bankruptcy Court for the District of Delaware to cover TECT’s Kansas manufacturing business assets.
According to the Bloomberg Law website, TECT had struck an agreement with NWI Aerostructures LLC, an entity owned by TECT parent Glass Holdings LLC, to kick off the bankruptcy auction. But Boeing, which had provided TECT with $60 million in debtor-in-possession financing, complained the undisclosed bid was too low.
Wichita, Kan.-based TECT filed for Chapter 11 in April after sales declined due to the pandemic and problems with Boeing’s 737 Max aircraft.
According to court documents, TECT owed about $18.3 million to Boeing and $4.2 million to Spirit AeroSystems. Other aerospace supply chain companies and Wichita businesses lined up as creditors in the bankruptcy case. The company has between 1,000 and 5,000 creditors overall.
According to the Wichita Business Journal, Spirit sued TECT Aerospace last summer, alleging that the supplier demanded price increases for parts to help cover costs it owed to other vendors.
The 737 Max was originally grounded in early 2019 after two deadly crashes. Boeing’s program is largely important to Wichita, as workers at Spirit AeroSystems build a structure on the plane.
Boeing’s order to halt production last year leads to thousands of local layoffs at Spirit — difficulties felt throughout the aviation supply chain in Wichita, even as 737 Max production has resumed.
