Despite objections from the International Association of Machinists and Aerospace Workers (IAM), the U.S. Bankruptcy Court for the Southern District of New York today approved Hawker Beechcraft’s motion to enter into exclusive negotiations with Superior Aviation Beijing Co. The proposed deal was announced early last week, but required a judge’s approval to proceed.
Approval of this motion allows Hawker Beechcraft to spend up to 45 days exclusively negotiating with Superior “regarding a strategic combination that would preserve jobs and product lines.” As part of the agreement, Superior will make $50 million in payments over the next month to sustain Hawker Beechcraft’s jet business–an initial deposit of $25 million by week’s end and a second $25 million deposit within 30 days.
Any definitive agreement reached with Superior will be subject to approval by the Committee on Foreign Investment in the U.S. and other regulatory agencies. In addition, any definitive agreement with Superior will be subject to termination if another potential purchaser succeeds in the mandatory competitive auction process, which will be overseen by the U.S. Bankruptcy Court.
The IAM opposed the deal, saying that it “should not be rushed through without adequate scrutiny by all interested parties, including federal regulators, state officials and the Wichita community.” Additionally, the IAM was concerned about the transfer of “valuable commercial and military-related technology to China.”