Cloudy Skies for GPA-Boeing Deal

From Reuters

Boeing Co. said it is in talks that could result in postponing jet deliveries to GPA Group Ltd., the world's largest aircraft leasing firm.

Irish-based GPA, which subleases its planes to major airlines, placed the largest order ever received by Boeing in 1989, committing to buy 182 planes worth more than $9.4 billion.

But the company has seen its fortunes fade along with those of the world airline industry.

In June, GPA canceled a planned $1-billion stock offering because of a lack of investor support, and now the company is seeking to pare its purchase commitments from all jet makers through the year 2000 to $5 billion from $12 billion.

Boeing declined to say what orders may be delayed, if any, and said no agreements have been reached.

GPA is also in talks about deliveries with other commercial jet makers--McDonnell Douglas Corp., the four-nation European consortium Airbus Industrie and Dutch-based Fokker.

The company is also trying to raise cash by offering $300 million in convertible shares, sources said Tuesday. The sources said GPA will seek to sell the shares at $8 each by the end of this year in Luxembourg.

The company will seek to list ordinary and convertible shares on the Dublin stock exchange early next year, the sources added.

At the time of GPA's order in 1989--a peak year for aircraft orders--Boeing said it considered all the orders to be firm, although a significant number of the planes were subject to reconfirmation at a later date. Delivery dates initially were set from 1990 until 1997.

Boeing now lists 154 planes on order from GPA, including 767s, 757s and 737s. In documents issued ahead of its planned stock offering, however, GPA listed only 91 firm orders with Boeing.

The actual number of confirmed orders is one issue that is expected to be clarified by the current discussions between GPA and the Seattle-based aerospace giant.

Boeing stock skidded $1 Tuesday to $36.75, its lowest level of the year.

The stock has fallen on concerns about Boeing's more than $90-billion order backlog.

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