March 28, 2012
Financially troubled Hawker Beechcraft Corp. finally received some good news March 27. The company reached an agreement with lenders Centerbridge Partners, Angelo Gordon & Company, and Capital Research & Management to provide Hawker with $120 million through an incremental term loan agreement. Without this infusion, Hawker Beechcraft likely would have defaulted on a $28.3 million interest payment due April 1 on debt accrued under a revolving credit line. Some experts were predicting the company’s imminent bankruptcy.
In a press release, Hawker said, “The company intends to use the proceeds of this loan to fund its ongoing operations as Hawker Beechcraft continues working with its lenders toward a comprehensive recapitalization. As part of this agreement, lenders currently holding approximately 70 percent of Hawker Beechcraft bank debt have agreed to defer the company’s obligation to make certain interest payments on the company’s senior secured revolving and term loans when due, and have granted the company relief from certain existing loan covenants. This forbearance agreement is scheduled to expire on June 29, 2012.”
Robert S. (Steve) Miller, Hawker Beechcraft’s newly appointed CEO, said, “…The company has been operating with a debt load that is restricting its ability to succeed … .We believe this agreement will stabilize the company’s current financial position and ensure Hawker Beechcraft continues manufacturing the best airplanes for our customers and providing first-class service and support. At the same time, the agreement provides Hawker Beechcraft and its lenders with additional time and flexibility to work together to recapitalize the company and better position Hawker Beechcraft for the future.”
That said, Hawker Beechcraft’s path ahead remains a challenging one. The company has another $1.4 billion of debt that comes due in 2014.
The manufacturer was hit hard by the recession, with sales dropping, costs of sales increasing, massive layoffs, a downgraded debt rating, and pension obligations that were underfunded. While the new liquidity and forbearance are certainly welcome news, Hawker Beechcraft must meet certain requirements as part of the deal. According to a report in The Wichita Eagle, Hawker must make $112.5 million in adjusted earnings before interest, taxes, depreciation, and amortization this year; and the company must maintain $162.5 million of liquidity, or cash plus available credit.
Smith Field in Fort Wayne, Ind., has withstood three separate attacks—in the 1970s, 1990s, and 2002—to close it and redevelop the land. Now, it's thriving.
Internet giant Google will acquire Titan Aerospace, the New Mexico-based developer of high-altitude unmanned aircraft systems.
The National Aeronautic Association has awarded the Collier Trophy for “the first unmanned, autonomous air system operating from an aircraft carrier.”
VOLUNTEER AT AN AOPA FLY-IN NEAR YOU!
SHARE YOUR PASSION. VOLUNTEER AT AN AOPA FLY-IN. CLICK TO LEARN MORE >>>
VOLUNTEER LOCALLY AT AOPA FLY-IN! CLICK TO LEARN MORE >>>
BE A PART OF THE FLY-IN VOLUNTEER CREW! CLICK TO LEARN MORE >>>