October 22, 2012
The future of the Hawker business jet lines and the Hawker namesake is uncertain after Hawker Beechcraft decided to end negotiations with would-be Chinese buyer Superior Air Beijing and move forward as a standalone company.
On Oct. 18, the Wichita-based company announced that the $1.79 billion sale was off to buyer Superior Air Beijing, after the two parties could not agree on terms. Instead, Hawker will emerge from bankruptcy rechristened as Beechcraft Corp.
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 had detailed potential scenarios under which it could operate as a profitable company if it shelved some or all of its jet products. In last week’s announcement, 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.
In a further acknowledgement of the likely divestiture of the Hawker line, Bill Boisture, chairman of Hawker Beechcraft Corp., said, “Beechcraft Corporation will emerge as the world’s leading designer and manufacturer of turboprop, piston and trainer/ attack aircraft with the largest global customer support network in the industry. Our business strategy will focus on growing our key existing product lines high performance single- and twin-engine piston and turboprop aircraft, uniquely missionized variants for the global special mission market, and multirole light attack and trainer aircraft systems, as well as the product development opportunities within these segments.”
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. Hawker Beechcraft’s key creditors have already agreed to the primary terms of the plan of reorganization, which will give them an equity stake in the reorganized company. Under the plan, Hawker Beechcraft would repay a post-petition $400 million in debtor-in-possession credit facility, and the company would enter a new finance package once it emerges from bankruptcy. Hawker Beechcraft maintains it has “more than sufficient liquidity” to complete its restructuring, and expects to exit bankruptcy protection in the first quarter of 2013.
Miller says the “go-forward” business plan the company has with its creditors ensures that Hawker Beechcraft will emerge in a strong operational and financial position.