February 25, 2013
Credit: Hawker Beechcraft
Kerry Lynch and William Garvey Washington
Beechcraft has exited Chapter 11 bankruptcy protection with a new name, new ownership and a new balance sheet that has shed billions of dollars of debt. Now the company must move ahead with selling its shuttered Hawker business-jet line and building on the brands of its existing models of piston and turboprop aircraft.
The Wichita aircraft maker—formerly known as Hawker Beechcraft—on Feb. 1 received court approval for its joint plan of reorganization that transferred ownership from investors Onex Corp. and Goldman Sachs to its major creditors in exchange for eliminating the $2.5 billion in debt. The plan became effective Feb. 15, and the company officially announced itself as Beechcraft on Feb. 19, ending the bankruptcy protection process that began May 3.
The former debt holders own a tad more than 90% of the company. The major shareholders are Centerbridge Partners; Angelo, Gordon & Co.; Sankaty Advisors, and Capital Research & Management.
Senior management of the former Hawker Beechcraft carries over into the new company with the exception of Steve Miller, the corporate turnaround specialist who joined a year ago as CEO. He will hold an advisory role with the new board. Bill Boisture, chairman of Hawker Beechcraft Corp., is now CEO of Beechcraft. Robert Johnson, former head of Honeywell Aerospace, is chairman of the Beechcraft board.
Onex and Goldman Sachs have lost most of their investment in the company, which according to one highly placed executive was a combined $1 billion. They also were bondholders, and received “pennies on the dollar,” similar to other unsecured creditors, Boisture says.
Beechcraft emerges as a smaller company, with employee numbers in Kansas dipping below the 4,000 level that the company guaranteed in order to receive full state and local incentives. Its total employment is 5,400, including facilities in Mexico. The company has a smaller product portfolio that includes its T-6A/B military trainer and AT-6 special mission aircraft derivative, along with the Bonanza and Baron piston-engine models and the King Air line of turboprops.
Last fall, the company outlined a vision of the future that could involve multiple new aircraft and began gathering feedback on the first of these, a single-engine turboprop concept.