With its official emergence from the bankruptcy of Hawker Beechcraft on February 19, the new Beechcraft Corp. returned to the roots planted in Kansas by founders Walter and Olive Ann Beech in 1932.
It has been a long and sometimes rough road since the company was founded, a path marked most recently by a Chapter 11 bankruptcy filing by Hawker Beechcraft in May 2012. Now, after nearly 10 months and confirmation of its joint plan of reorganization by the bankruptcy court on February 1, the aircraft manufacturer has exited bankruptcy.
“We are now prepared to go forward as the new Beechcraft Corporation, focused on our light pistons, civil and military turboprops and our global customer service,” said Bill Boisture, who came to the company as chairman and CEO in 2009 and remains as CEO of the new Beechcraft.
“The board will have the interest of the major shareholders as its responsibility,” added Boisture. At the same time, the company’s Global Customer Support system and Hawker Beechcraft Services will continue backing all Hawker and Beechcraft products (with the exception of warranty support on the carbon-fiber jets).
Elaborating on Beechcraft’s solvency as it emerges from bankruptcy, Boisture said the $2.2 billion coming in has been converted to equity and is in the hands of the secured lenders. The fully committed $600 million in exit financing is a combination, he explained, of term debt and revolving credit. The term debt will be drawn down to pay court-approved claims and what remains will go toward operating capital. The revolving credit, he added, will be undrawn.
Beechcraft has shut down jet production, the 20 remaining new and in-production Hawker 4000s have been sold and the only remaining inventory of Hawker business jets is a handful of used Hawker 4000s that will also be sold, Boisture said. The disposition of those used aircraft is part of a plan to sell all Hawker assets, “including type and production certificates, intellectual property, tooling, work in progress and any Hawker-related spares.”
With defense work representing roughly one-third of revenues, Beechcraft has submitted its AT-6 for the U.S. Air Force light air support aircraft program and expected a decision on the service’s selection on February 22. “We have developed and brought to market an efficient, low-cost, highly accurate weapons system in the AT-6,” Boisture declared. He added that 2013 will be the year Beechcraft wins an AT-6 launch customer.
In December last year, in a filing with the bankruptcy court, Hawker Beechcraft forecast sales of $1.9 billion this year. Boisture believes that goal is realistic, pointing out among other factors the efficiencies gained during the bankruptcy and reorganization. Among those is a reduction of Wichita facilities by approximately 35 percent, and a 50-percent cut in total employment since 2009.
“Today marks the rebirth of an 80-year-old American aircraft manufacturing business with a globally recognized brand,” said Boisture on February 19. With a foundation of highly skilled and dedicated workforce focusing on building aircraft of exceptional quality and reliability, he concluded, “we will compete worldwide and we will win.”