Plans for an improved version of the Eclipse very light jet may once again be possible after Chinese investors rescued its parent company from Chapter 11 bankruptcy last week.

U.S.-based Citiking International stepped in after One Aviation Corp., which owns includes Eclipse Aerospace and Kestrel Aircraft, gave up its cash flow struggle and voluntarily filed for Chapter 11, allowing a reorganization plan that will position the company for the future.

Citiking is a U.S. financial entity set up by a Chinese group to complete the deal, said One Aviation CEO Alan Klapmeier.

“There’s money behind them in China,” Klapmeier added. “The Chinese group has been an investor since last October and has been seeking an acquisition. They’re not a short-term finance source through bankruptcy – they’re the long-term buyer.”

Eclipse is no stranger to China. Three years ago it signed a $60 million agreement with Jinggong General Aviation for 20 Eclipse aircraft, and Klapmeier attended the ABACE Asian business Aviation show in Shanghai last year with what he said was the first to be delivered there. Jinggong was also an investor in One Aviation.

But since then One Aviation has not generated enough cash to remain solvent, and has not delivered a single aircraft this year.

Now, while the bankruptcy court decides to approve One Aviation’s reorganization plan, which includes a post-Chapter 11 debt facility of $17 million, “It’s business as usual here,” Klapmeier said. “Warranties are being honored. Airplanes are being serviced. It will improve the ability to buy parts.” 

Eclipse has 286 aircraft in service around the world.

Its bankruptcy is a far cry from the heady days of the past. Once holding $70 million in deposits on orders for 700 aircraft, it now has debts of nearly $200 million. It has current orders for 15 aircraft, and is already making plans to be able to deliver up to 50 a year by 2024.

Eclipse received more than $1.4 billion in investment in the 10 years up to 2008, enabling it to develop, certify and put the EA500 aircraft into production. In 2005 it received the prestigious Collier Trophy in the VLJ class for “technical innovation and the advancement of general aviation.”

This is the second bankruptcy for Eclipse. It was liquidated in 2008 after a long period of losing money on each aircraft delivered; its assets were bought, and formed the basis of a new Eclipse company.

The Eclipse 550 jet was certified in March 2014, and 32 jets were subsequently manufactured and delivered. The company became profitable on a per-unit basis, achieving over 50% gross margin per aircraft on deliveries utilizing pre-existing inventory and approximately 30% gross margin per aircraft on future aircraft.

One Aviation had recently spent considerable capital on developing the much improved Eclipse 700, known as “Project Canada,” and this undoubtedly contributed to its liquidity problems. With new investment, it plans to bring this aircraft to market. It will also focus on providing services, maintenance and upgrades to the existing fleet of Eclipse EA500 and EA550 aircraft. 

Under the plan, Klapmeier would remain with the company, although he said there are no contracts or promises.