The head of Beechcraft Corp. said Tuesday it plans to sell the
assets of its shuttered Hawker's business jet unit by midyear as
part of the firm's exit from bankruptcy protection.
The company formerly known as Hawker Beechcraft Inc. filed for
Chapter 11 last year as a prolonged slump in aircraft sales hit one
of the most famous names in corporate jets and left it with an
unsustainable debt load following a leveraged buyout in 2007.
Beechcraft Chief Executive Bill Boisture said that the proposed
sale would include designs and intellectual property related to its
jets, as well as licenses, factory tooling and, potentially, its
Little Rock, Ark., facility.
An effort to sell the company's jet and turboprop aircraft
business to China's Superior Aviation Beijing Co. for $1.79 billion
collapsed last fall because of concerns about separating its
military business, which includes the AT-6 attack aircraft.
"This is a simpler, more understandable sale," said Mr. Boisture
in an interview. "The sale of these [corporate jet] assets doesn't
have the risk that the sale of the entire company had."
Beechcraft officially emerged from bankruptcy protection on Feb.
15, and Mr. Boisture said Tuesday that the company would focus on
reestablishing its battered brand, supporting existing customers
and upgrading and developing new propeller-driven aircraft.
Mr. Boisture said potential bidders for the jet business
included some who had previously expressed interest in the company,
as well as new suitors.
In July, Hawker disclosed it had been in discussions with five
suitors alongside Superior Aviation. According to people familiar
with the discussions, the others in talks with Hawker were Textron
Inc. (TXT), India's Mahindra & Mahindra Ltd. (500520.BY) of
India, Brazil's Embraer SA (ERJ, EMBR3.BR), and New United, another
Chinese company. Also mulling a bid was Carlyle Group (CG), the
large U.S. private-equity firm, the people had said.
Beechcraft emerged from Chapter 11 under the control of a group
of hedge funds that will convert their debt into equity. Funds
including Bain Capital's Sankaty Advisors, Angelo Gordon & Co.
and Centerbridge Partners, would swap more than $920 million in
debt for an 81.1% stake in the restructured company. Senior
bondholders, unsecured creditors and the government's pension
insurer would share in the remaining 18.9% stake. To fund the plan,
lenders led by J.P. Morgan Chase & Co. (JPM) agreed to provide
$600 million in bankruptcy-exit financing.
Hawker's restructuring plan will slash $2.5 billion in debt off
its books and hand ownership of the aircraft manufacturer to the
group of hedge funds.
Mr. Boisture flew himself in on a Beechcraft Bonanza to Wichita,
Kan., where the 80-year-old company is based, on Monday morning to
prep for talks with the company. He held the first of four meetings
with employees starting at 7 a.m. CT on Tuesday.
Hawker Beechcraft sought bankruptcy protection after laboring
under a $2.3 billion-plus debt load tied to a 2007 leveraged buyout
by Goldman Sachs Group Inc.'s (GS) private-equity arm and Onex
Partners. The pair bought Hawker for $3.3 billion just before the
financial crisis hit, damping demand for business jets.
The company hired Robert S. "Steve" Miller, a restructuring
veteran, to take over as CEO last February. Since then, the company
has been cutting jobs, whittling away a workforce that had already
shed 1,900 staff between late 2007 and the end of 2011. Mr. Miller
will serve as a senior adviser and the board will decide his future
involvement, Mr. Boisture said.
Write to Emily Glazer at emily.glazer@wsj.com and Jon Ostrower
at jon.ostrower@wsj.com
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