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.


 
 

 

Northrop, Navy celebrate legacy of EA-6B Prowler

Northrop Grumman photograph by Edgar Mills The U.S. Navy’s last operational EA-6B Prowler, designed and built by Northrop Grumman, lifts off from Naval Air Station Whidbey Island, Wash. in a ceremonial fly-away June 27 from its long time operational base. The Navy is retiring the Prowler after nearly 45 years of service.   The U.S....
 
 

Lockheed signs agreements for two full-flight simulators

Lockheed Martin Commercial Flight Training and Airbus have signed a frame contract enabling Airbus to expedite procurement of flight simulation devices for their customers, Airbus training centers and their affiliates worldwide. The frame contract emphasizes the shared intent to partner on future training programs, and combines Airbus’ and Lockheed Martin Commercial Flight Training’s expert...
 
 

Drone Aviation receives order for U.S. Army aerostat system enhancement

Drone Aviation Holding Corp., a developer of specialized lighter-than-air aerostats and tethered drones, announced June 24 that its wholly owned subsidiary, Drone Aviation Corp., has been awarded an order from U.S. Government prime contractor BAE Systems for parts and services related to enhancing and supporting two WASP aerostat systems owned and operated by the U.S....
 

 

Boeing names Muilenburg as chief executive officer

The Boeing board of directors has elected Dennis A. Muilenburg the company’s 10th chief executive, succeeding W. James (Jim) McNerney, Jr., who held the position for the past 10 years. Muilenburg, who has served as Boeing president and chief operating officer since 2013, becomes president and CEO July 1. McNerney, who joined Boeing’s board of...
 
 
boeing-thailand

Boeing, Thai Airways International celebrate 25th direct 777 delivery

  Boeing and Thai Airways International Public Company Limited celebrated the Thailand flag carrier’s 25th direct 777 delivery, a 777-300ER (Extended Range), from the Boeing delivery center in Everett, Wash.  “...
 
 

General Dynamics receives $219 million for U.S. Army’s WIN-T increment 2 systems

General Dynamics received the first full rate production order from the U.S. Army to build additional Warfighter Information Network – Tactical (WIN-T) Increment 2 systems.  The $219 million order includes the production of more than 300 vehicle-based network communication nodes along with related equipment and materials. WIN-T Increment 2 is the Army’s communications backbone providin...
 




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=""> <s> <strike> <strong>