Business

January 30, 2013

Hawker Beechcraft closer to bankruptcy emergence

Roxana Hegeman
Associated Press

Kansas plane maker Hawker Beechcraft said Jan. 25 that its key creditors overwhelmingly backed a proposed reorganization plan in a vote that moves the company closer to emerging from bankruptcy protection as early as next month.

The Wichita, Kansas,-based company said that it will seek court approval to exit bankruptcy at a hearing Thursday and expects to emerge from Chapter 11 in the second half of February, if the bankruptcy judge approves the plan.

It also has secured an underwriting commitment for $600 million in exit financing consisting of a term loan and revolving line of credit from JPMorgan Chase Bank and Credit Suisse.

“The tremendous show of support of our creditors for the Plan, which will dramatically reduce Hawker Beechcraft’s debt load, and the financing commitment from JPMorgan and Credit Suisse mark an important milestone for the company as it moves closer to emerging from the restructuring process,” CEO Robert “Steve” Miller said in a news release.

The slimmed down company – which plans to rename itself Beechcraft Corp. – will focus on more profitable turboprop, piston, special mission and military aircraft, as well as its parts, maintenance, repairs and refurbishment business. The reorganized company plans to shed its struggling business jet operations.

Under the reorganization plan, secured bank debt incurred before the bankruptcy as well as unsecured bond debt and certain general unsecured claims will be cancelled with those creditors receiving equity in the reorganized company. A board appointed by the new owners will take over once the company emerges from bankruptcy protection.

“The reorganized Beechcraft Corporation will emerge from this process in a strong operational and financial position, with the working capital and flexibility to execute a strategy built around our core products like the world-renowned King Air twin engine turboprop and the T-6 military training aircraft, which will enable the company to compete well into the future,” said Bill Boisture, chairman of Hawker Beechcraft Corp.

It is unclear yet how many employees the reorganized company will keep as it stops making business jets.

“Job numbers depend on completing the reorganization – and military contracts that could significantly affect numbers one way or the other,” said Frank Larkin, spokesman for the machinists union, which represents Hawker Beechcraft workers.

The bankruptcy court is also expected to rule Thursday on the fate of company’s three pension programs. Hawker Beechcraft has asked the court to allow it to continue the pension plan for hourly workers under an agreement reached with the machinists union that freezes pensions and creates a new retirement savings plan.

“That was a major goal for our negotiations and if that is approved it will be a significant accomplishment,” Larkin said.

Hawker Beechcraft, owned by Onex Partners and GS Capital Partners, filed for bankruptcy protection in May. It has struggled with the sluggish business jet market more than other plane makers. It was purchased in 2007 in a highly leveraged deal just before the general aviation market tanked.

The complex bankruptcy proceedings have involved 18 entities, 5,400 employees worldwide and $2.4 billion in debt. In addition to its Wichita headquarters, the company has factories in Little Rock, Ark., the United Kingdom and Mexico, as well as more than 100 service centers worldwide.

Hawker Beechcraft traces its Kansas roots to Beech Aircraft Corp., a company founded by Walter and Olive Ann Beech that began making aircraft in the 1930s.




All of this week's top headlines to your email every Friday.


 
 

 

Headlines October 29, 2014

News: Unmanned rocket explodes just six seconds after taking off - A NASA rocket due to be visible across the East Coast on its way to the International Space Station has blown up on the Launchpad. IG: Former chief of wounded warrior office broke law, DOD regs - The Defense Department inspector general has recommended “corrective action”...
 
 

News Briefs October 29, 2014

F-35C makes first landing at Virginia Beach Navy base The Navy says an operational F-35C joint strike fighter has landed at Naval Air Station Oceana for the first time. Naval Air Station Oceana is the Navy’s master jet base on the East Coast. The Navy says the plane came to the Virginia Beach base Oct....
 
 

Time to turn to American technology for space launch

For the first time since the Cold War, the United States has deployed armored reinforcements to Europe. To counter Russia’s aggression, several hundred troops and 20 tanks are now in the Baltic. Yet the U.S. military is still injecting millions into the Russian military industrial complex. In late August, the United Launch Alliance – the...
 

 
Air Force photograph by Joe Davila

Boeing, Air Force demonstrate Minuteman III readiness in flight test

Air Force photograph by Joe Davila Boeing supported the launch of an unarmed Minuteman III intercontinental ballistic missile at Vandenberg Air Force Base, Calif., on Sept. 23, 2014. Boeing supported the U.S. Air Force’s succ...
 
 

Pentagon going to court for refusing to release Sikorsky data

PETALUMA, Calif. – The Pentagon is refusing to release any data on any prime contractors participating in the 25-year-old Comprehensive Subcontracting Plan Test Program. The American Small Business League launched a program in 2010 to expose the fraud and abuse against small businesses the CSPTP had allowed. As a test the ASBL requested the most...
 
 
Northrop Grumman photograph

Raytheon Griffin C flight tests demonstrate in-flight retargeting capability

Northrop Grumman photograph Northrop Grumman has received a contract from the U.S. Marine Corps for low-rate initial production of the AN/TPS-80 Ground/Air Task Oriented Radar (G/ATOR). G/ATOR is the first ground-based multi-mi...
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>