A MANUFACTURER at Bournemouth Airport owed millions of pounds to creditors when it went into administration and could face claims for tens of millions more, a report says.

Aim Altitude – which makes interiors for commercial aircraft – was sold immediately out of administration to another arm of its Chinese owner AVIC.

A report by administrators at Grant Thornton reveals Aim Altitude Ltd and Aim Altitude (UK) Ltd changed hands for £2million in a pre-pack sale out of administration.

It says trading company Aim Altitude (UK) owed £6.7m to unsecured creditors when administrators were appointed.

But Aim Altitude Ltd, the parent company, was expected to make a claim against its subsidiary for intercompany loans and management charges.

The £6.7m figure also excludes “potentially significant breach of contract claims which are expected to crystallise as a result of the insolvency of the companies”, it said.

It added that “these claims could be significant (potentially in the tens of millions) and as such would be expected to materially dilute the potential return to those unsecured creditors”.

Parent company Aim Altitude Ltd owed £2.7m to unsecured creditors, but its shareholder – AVIC Cabin Systems Co – was expected to make a claim against it and to be its largest unsecured creditor, having funded the group through £170m in loan notes.

The report, by joint administrator Helen Dale of Grant Thornton, said: “The group has incurred significant losses in prior years. These losses were initially a result of a number of loss-making legacy contractual relationships but were compounded by the Covid-19 outbreak that caused manufacturing delays and escalated substantial changes in the tourism and aviation industry.

“The period of losses culminated insignificant financial distress. To overcome these on a solvent basis would have required both a fundamental restructuring of the AIM Group’s balance sheets and substantial renegotiation of its contractual relationship s with major customers.”

The business was sold to AVIC Cabin Systems (UK) Ltd, which shared the same parent company, AVIC Cabin Systems Co Ltd.

It bought the stock and work in progress, and Aim Altitude Ltd’s shares in its subsidiaries, but not the company’s other site in Cambridge. AVIC Cabin Systems instead took a long-term lease on the Cambridge site, while the freehold will be marketed by administrators to raise money for creditors.

All 383 staff were transferred to the new owner.

The sale prompted some MPs, including former Conservative leader Sir Iain Duncan Smith, to urge the government to review the involvement of the Chinese state in the business.

Aim Altitude UK’s local creditors included the former Christchurch Borough Council, which was owed £332,163 according to the administrator’s documents; Team Recruitment in Poole, owed £46,916; and KW Engineering of Poole, owed £26,323.

Eastleigh Borough Council, which owns the Bournemouth Airport site, was owed £288,000.