Not quite two weeks after filing for U.S. Chapter 11 bankruptcy protection, Hawker Beechcraft said at EBACE today that it will be “well positioned for the future” when it emerges from bankruptcy this later this year.
“There’s been a lot of misinformation and speculation. We’re going to talk to you about facts,” said Hawker Beechcraft executive vice president of customers Shawn Vick. “Chapter 11 protection should not be confused with liquidation or insolvency. There is simply too much value in Hawker Beechcraft, its people, products and brands to allow that to happen.”
Since investment firms Goldman Sachs and Onex Partners purchased Hawker Beechcraft in 2007 in a leveraged buyout, the company has struggled under the $2.5 billion in debt the deal created, and the $125 million annual interest payments required to service it. Vick pointed out that, at the time, annual business jet sales amounted to some 1,600 units, with projections of 15-percent annual growth. In reality, the company faced a 65-percent decline in sales after the 2008 financial crisis.
Under the terms of the Chapter 11 reorganization, creditors will exchange their debt for ownership of the company, and have also extended $400 million to finance ongoing operations while the restructuring is concluded. Goldman Sachs and Onex, which each own 49 percent of Hawker Beechcraft, will retain small positions in the company.