P.E.I. writes off $8.2M of Testori loan
Concerns expressed over survival of aeropace company
The Progressive Conservative opposition is demanding to know why the P.E.I. government wrote off $8.2 million in loans to Summerside-based Testori Aerospace.
Testori employs 140 people in several locations in Prince County, with the biggest part of the business being building interiors for airplanes and trains. The company was founded on P.E.I. as part of an Italian company in the 1980s but later became independent.
Testori was sold to the American company TMC Avion in April 2011, and the sale has been the subject of millions of dollars worth of lawsuits in both the U.S. and P.E.I.
In February, the P.E.I. government said the company was in arrears on a $13.2 million loan, but wouldn't say by how much. Now the Opposition has learned the government sold its $13.2 million loan to PEI Westside Funding for just $5 million.
"So suddenly the government decides they're going to bail out the $13 million that's owed to the province; they get $5 million for it. It's a top secret transaction," Opposition Leader Steven Myers charged in the legislature. Tory MLA James Aylward continued the attack.
"Government has washed their hands of this file, putting 140 good-paying jobs in East Prince and West Prince at risk," said Aylward.
Premier Robert Ghiz responded, saying the government is working closely with the new owners to ensure the continued success of the company.
"Because of this company coming in, purchasing these shares, we are going to be able to see, hopefully, Testori prove to be a very successful company," he said.
Outside the legislature, Myers expressed concerns over the future of the company, given the apparent need to write off $8.2 million in loans.
"There's a reason why the government wanted to get out of it, and you know, I think there's probably concerns there," he said.
Innovation Minister Allen Roach reiterated the premier's desire to do what was possible to help the company.
"It will give them a greater opportunity today than they had when the debt load was heavier," said Roach.
"That's my belief, is that it gives them every opportunity. Not only the company, but also the employees."
But despite the government's efforts, said Roach, there is no guarantee the company will survive.
Question of the day: Should the government have written off $8.2 million in loans to Testori?
- This story originally reported PEI Westside Funding is a subsidiary set up by TMC to run Testori, as Premier Robert Ghiz told the legislature. In fact, it is an independent company.Apr 19, 2013 11:32 AM AT