Hawker Beechcraft’s proposed sale to a Chinese firm was not a complete surprise. But that the smaller Superior Aviation Beijing emerged as the possible bidder instead of the larger AVIC or CAIGA leaves some industry experts wondering whether the deal will close at the $1.79 billion asking price.

Hawker Beechcraft announced July 9 that it had reached an exclusivity agreement to explore the potential sale of all but its military business to Superior Air Beijing.

The U.S. Bankruptcy Court for the Southern District of New York has scheduled a hearing July 17 to consider Hawker Beechcraft’s request to enter into exclusive negotiations and a “refund” agreement for the company’s sale.

Under the exclusivity agreement, the companies would negotiate a definitive accord over 45 days. During this time, Superior Air would provide up to $50 million in funding “to maintain certain product lines that [ Hawker Beechcraft ] would likely discontinue,” according to court documents.

Hawker Beechcraft has not said which lines are at risk, but a company presentation made this spring detailed the likelihood of shelving the Premier and/or Hawker 4000 programs, along with the permanent disbanding of the Hawker 400.

Hawker Beechcraft, which filed for Chapter 11 bankruptcy protection May 3, had evaluated operating as a standalone entity, in addition to accepting eight bids for the potential sale of some or all of the company. The company on June 30 filed a preliminary plan of reorganization as a standalone entity that would have ownership of Hawker Beechcraft transfer from Goldman Sachs and Onex to its creditors, and in exchange some $2.5 billion in debt would be erased. But at the same time, Hawker Beechcraft held open the possibility of selling the company.

Hawker Beechcraft says if it is unable to reach agreement with Superior Air Beijing in a timely manner, it would then move forward on its preliminary plan of reorganization.

Hawker Beechcraft would be unable to sell its military business to the Chinese firm, and the proposed deal includes a potential refund of up to $400 million “depending upon the price which the debtors received for the defense-related businesses” (see related article on Page 7).