Aeromexico has their own maitenence facility and actually services some of Delta's planes. I guess it all depends on how much honesty and integrity you place in Avolar's initial investors. They owe GACF 2 million plus a 600K note that was extended to June 30, 2007. If they bid and take Aeromexico, I believe that Aeromexico would service Avolar's planes. Per the conference call, a lot of the work was done in Tijuana, Mexico and without performance or bank guarantees of payment. Thus, we are talking foreign courts and a simple unsecured creditor relationship. On the call, they mentioned customers that talk out of both sides of their mouths. I would be very wary of the potential eventual collection with that type of customer description. They indicated that full settlement was expected by the end of next week (June 4th). I'm out of this because I feel you can't trust management to timely disclose important material facts to the shareholders. I wouldn't invest again without knowing that the Avolar receivable had been collected. GACF's line of credit is tied to their inventory and acceptable receivables. The credit line is fully used by amounts drawn and obligation action guarantees. I doubt sincerely that a receivable where the payee has repeated failed to live up to payment settlement terms would be considered acceptable. While GACF may not think bank covenant action is likely, this may change if a $2M hickey becomes apparent. One other thing to consider, this is Mexico. Maitenence costs may be cheaper and Aeromexico could even become a GACF competitor. Again it all depends on what level of honesty and integrity, you are wiiling to assign to Avolars initial investors. Also to be considered, What is the carrying costs and level of actitity is at GACF's Tijuana's facility. This was purchased in anticipation of increased Avolar activity.
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