by Lance Turner
Posted 10/18/2012 07:38 am
Updated 8 months ago
Hawker Beechcraft Inc. of Wichita, Kan., said Thursday that it plans to emerge from Chapter 11 bankruptcy as a standalone company, and that a planned takeover deal with Superior Aviation Beijing Co. Ltd. will not happen.
In a news release, Hawker said the $1.79 billion deal will be abandoned "because the parties could not reach agreement on the terms of a Plan Sponsorship Agreement."
Hawker, which filed Chapter 11 bankrupcy in May, employs about 280 people at Adams Field in Little Rock, where it finishes out its line of private jets. That operation would have been included in the sale to Superior Aviation.
Post bankruptcy, the company said it plans to rename itself "Beechcraft Corporation" and focus on its profitable turboprop, piston, special mission and trainer/attack aircraft businesses. It said it might sell "some or all" of its other product lines, or close its "entire jet business if no satisfactory bids are received."
In July, it announced the deal to be acquired by Beijing-based Superior Aviation. Hawker said the move could save "thousands of American jobs," including those at its Little Rock and Wichita operations.
Under the deal, Superior would have acquired Hawker for $1.79 billion and made payments over the following weeks to keep the company going until the close of the purchase, which was subject to U.S. Bankruptcy Court approval and the auction process.
The deal would not have included Hawker's Beechcraft Defense Company, which builds T-6 trainer and AT-6 light attack aircraft.
At the time, Hawker said that if purchase negotiations "are not concluded in a timely manner," Hawker would proceed with its banruptcy reorganization plan, aiming to emerge "as a standalone entity with a more focused portfolio of aircraft."
When announced, the Hawker/Superior deal was met with skepticism by industry analysts. And in July, the International Association of Machinists and Aerospace workers, which represents 3,500 of Hawker Beechcraft's 18,000 employees, filed an objection to the deal in bankruptcy court.
"We made the decision to proceed with the standalone Plan of Reorganization after determining that, despite our best efforts, the proposed transaction with Superior could not be completed on terms acceptable to the company," Robert S. "Steve" Miller, Hawker's CEO, said in a news release Thursday.
"We are disappointed that the transaction did not come to fruition, but we protected ourselves by obtaining a $50 million deposit from Superior that is now fully non-refundable and property of the company," he said. "The go-forward business plan we have developed with our creditors ensures that we will emerge from this process in a strong operational and financial position, with an enhanced ability to compete well into the future."
As "Beechcraft Corporation," the company will focus on its turboprop, piston, special mission and trainer/attack aircraft. The company also said it would focus on its "high margin" parts, maintenance, repairs and refurbishment businesses, "all of which have high growth potential."
"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," Bill Boisture, Hawker's chairman, said.
"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," he said.
Meanwhile, the company and its creditors will evaluate "strategic alternatives" for its other product lines.