Hawker Beechcraft China deal collapses, jets jettisoned
After widespread doubts about the high purchase price, missed deadlines, and failed face-to-face meetings, the offer by Chinese businessman Shenzong Cheng and his wife, Qin Wang, to purchase Hawker Beechcraft for $1.79 billion has failed. The couple, operating as Superior Aviation Beijing, owns Superior Air Parts in Coppell, Texas, along with an American helicopter company that was moved to China but never got an order.
Hawker Beechcraft officials said in a statement Oct. 18 that they now plan to emerge from Chapter 11 bankruptcy as a standalone company. The new plan would result in a sale of jet aircraft lines, or closure of jet production lines if no bids are received. “As part of this plan, the company, in consultation with its key creditor constituents, is evaluating its strategic alternatives for the Hawker product lines, which could include a sale of some or all of those product lines, or a closure of the entire jet business if no satisfactory bids are received,” the company announced.
The company will be renamed the Beechcraft Corporation, since no Hawker jets will be manufactured, and will focus on turboprop (King Air C90, 250, 350), piston-engine (Bonanza G36 and Baron G58), special mission (King Air) aircraft, and trainer/attack aircraft (T–6 single-engine turboprop). The company plans to keep and grow its parts, maintenance, repairs, and refurbishment businesses.
As part of the negotiation, Hawker Beechcraft received from Superior Aviation Beijing two payments of $25 million each that it gets to keep. The purpose of those funds was to keep the jet production lines open during negotiations. Major creditors have already agreed to the new plan.
Bill Boisture, chairman of Hawker Beechcraft Corporation, released this statement: “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 multi-role light attack and trainer aircraft systems, as well as the product development opportunities within these segments.”
Hawker Beechcraft will soon file an amended Joint Plan of Reorganization with the U.S. Bankruptcy Court for the Southern District of New York. A hearing is scheduled Nov. 15.
Hawker Beechcraft’s $400 million debtor-in-possession post-petition loan will be repaid fully in cash. In addition, the company will enter into a new financing package that will go into effect upon its emergence from Chapter 11.
October 18, 2012