October 19, 2012
Hawker Beechcraft plans to move forward as a standalone company after talks with would-be Chinese buyer Superior Air Beijing reached an impasse over the terms of a “plan sponsorship agreement,” the company says.
While not a complete surprise, the decision could mean the end of some, if not all, of the company’s jet lines if it cannot find a buyer for those products. Hawker Beechcraft says it will move forward with a business plan that “focuses on its turboprop, piston, special mission and trainer/attack aircraft, the company’s most profitable products.”
The company in April detailed potential scenarios under which it could operate as a profitable company if it shelved some or all jet products.
In the announcement released yesterday, the company said its turboprop, piston, special mission and trainer/attack aircraft are not only the most profitable but have high growth potential. Hawker Beechcraft also plans to continue to build up its “high-margin” parts, maintenance, repairs and refurbishment business.
The company says it will evaluate “strategic alternatives” for the jet lines, but it could mean the closure of the entire jet business if it does not receive a satisfactory bid.
Hawker Beechcraft expects to file an amended joint plan of reorganization shortly detailing its plan to emerge from Chapter 11 bankruptcy protection. The company plans to schedule a hearing Nov. 15 on an amended disclosure statement detailing the plan of reorganization. Under an extended timeline granted last summer, Hawker Beechcraft has until Feb. 27 to solicit votes on a plan of reorganization.
Debt-laden Hawker Beechcraft entered Chapter 11 on May 3 and filed a tentative plan at the end of June under which the company’s creditors would take ownership of the Wichita manufacturer in exchange for eliminating some $2.5 billion in debt.
The company, however, continued to accept bids for a potential sale of some or all of its assets. While several existing manufacturers expressed potential interest in some elements of Hawker Beechcraft, little-known Superior Air Beijing emerged as the would-be buyer under a tentative $1.79 billion proposal to buy all of the company except its defense business.
Superior paid a $50 million deposit as part of the ongoing negotiations—a deposit that Hawker Beechcraft CEO Robert Miller says is now non-refundable.