* To close jet business if no satisfactory bids received
* Expects to emerge from bankruptcy in Q1 of 2013
* To focus on turboprop, piston, special mission,
By Tanya Agrawal
Oct 18 Debt-laden aircraft maker Hawker
Beechcraft Inc said it will go it alone after plans
to sell itself to a Chinese firm fell through, but likely will
get out of the corporate jet business.
The Wichita, Kansas-based company, owned by the private
equity units of Goldman Sachs Group Inc and Onex Corp
, filed for bankruptcy protection in May, unable to
support a $2.5-billion debt load.
Hawker, which makes general aviation turboprops and military
aircraft as well as business jets, said in July that it was in
exclusive talks with the China's Superior Aviation Beijing Co
over the sale of the company for $1.79 billion.
It said on Thursday it could not agree on terms with
Superior, a 60-40 joint venture between privately owned Beijing
Superior Aviation Technology Co and government-backed Beijing
E-Tong International Investment & Development Co.
At a conference in New York on Thursday, Hawker CEO Steve
Miller said China-bashing by U.S. presidential candidates may
have contributed to failure of the sale talks, which involved
many complex issues.
"Global politics may have interfered," said Miller, who was
in Beijing last week trying to sell the firm. He mentioned
competing calls from Democrats and Republicans for toughness on
China's currency policies.
In Tuesday's presidential debate, Republican Mitt Romney
slammed President Barack Obama for allowing China to keep its
currency at low levels to the detriment of U.S. competitiveness
and trade deficits. Obama said he is tougher on trade policies
with China than Romney would be.
Hawker, whose sale would have needed approval from the
Committee on Foreign Investment, a U.S. government panel, also
faced other cross-cultural complexities
"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," Miller said in a prepared statement.
Hawker, which filed for bankruptcy in May, said it intends
to emerge from Chapter 11 in the first quarter of 2013 as a
standalone company focusing on turboprop, piston, special
mission and trainer/attack aircraft. It said it will rename
itself Beechcraft Corp.
The company said it was evaluating strategic options with
creditors for its Hawker product line, which includes the
struggling business jet division and that the business would be
closed if there are no satisfactory bids.
Under the proposed deal with Superior, Hawker's politically
sensitive defence business would have remained a separate entity
that analysts said would probably be sold to a U.S. buyer.
Prospects for the jet business look grim, analysts said.
"I don't see any of the established players like Bombardier
taking an interest in the segment," said Neal Dihora,
an analyst at Morningstar Inc.
"The summer bookings (for business jets) have been slow and
it is a very crowded space. The prospective buyer would have to
be a new entrant with deep pockets."
Hawker's competitors include General Dynamics Corp's
Gulfstream and Textron Inc's Cessna, as well as Brazil's
Embraer SA and Canada's Bombardier.
Hawker, which will file an amended reorganization plan, said
general unsecured claims will be canceled and holders will
receive equity in the reorganized company. Under the new plan,
the company will receive a new loan and will be able to repay
its $400 million in debtor-in-possession financing.
The new reorganization plan, which is subject to approval
from the bankruptcy court, has the support of major creditors,
Hawker said. A hearing is expected on Nov. 15, it said.
Goldman Sachs's private equity unit and Canada's Onex,
bought Raytheon Aircraft Co from Raytheon Co for $3.3
billion at the height of the buyout boom in early 2007 and
renamed it Hawker Beechcraft.
The company, loaded down with debt from the buyout, went
into a tailspin after 2008 financial crisis and subsequent
The case is In re: Hawker Beechcraft Inc, U.S. Bankruptcy
Court, Southern District of New York, No:12-11873.