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Hawker Beechcraft files financial forecasts with bankruptcy court

  • The Wichita Eagle
  • Published Wednesday, Nov. 28, 2012, at 11:43 p.m.
  • Updated Monday, Dec. 3, 2012, at 9:34 a.m.

Hawker Beechcraft filed its financial forecasts with the bankruptcy court this week for a restructured, standalone company called Beechcraft Corp., which predicts sales of $1.9 billion in 2013 rising to $2.7 billion in 2016.

The company plans to concentrate on its Beechcraft products — the King Air, Baron and Bonanza — along with its military trainer and light attack and aftermarket businesses when it emerges from bankruptcy early next year.

Hawker Beechcraft filed for Chapter 11 bankruptcy protection May 3.

The forecasts assume that the company will not continue its corporate jet business because of continued sluggish demand, high manufacturing costs and significant losses on the sale of the Hawker 4000 and Premier aircraft.

And it expects a “slightly negative” outlook for the sale of its Hawker 900XP because it expects competitors to introduce new products, which will erode its market share, the filing said.

Hawker Beechcraft said last month it would move forward with a smaller, restructured company after negotiations to sell the business, except for its defense business, to Superior Aircraft Beijing fell through.

For the restructured, standalone company, projections forecast net losses of $27.9 million next year, growing to net income of $92.9 million in 2014 and $139.1 million in 2016, the last year included in its financial projections.

It expects to deliver 248 airplanes next year, including 208 Beechcraft aircraft and 40 military trainers. Deliveries are forecast to rise yearly, growing to 381 planes in 2016, including 325 Beechcraft aircraft and 56 trainers and AT-6 attack planes.

Beechcraft deliveries are expected to grow because of product upgrades and the capture of additional market share, while growth in the military business will largely be from deliveries of AT-6 attack aircraft, a version of the company’s T-6 military trainers, the filing said.

The forecast assumes interest payments on a $525 million package of exit financing — including a $275 million term loan and $250 million working capital loan.

And it reflects an agreement in principle for the company to terminate the salaried pension and base pension funds and for the Pension Benefit Guaranty Corp. to step in.

Obligations to hourly workers’ pensions are to be frozen as of Dec. 31 and assumed by the new company.

A hearing in bankruptcy court is scheduled for Thursday. The company is asking the court to extend the termination date of a debtor-in-possession credit agreement from Dec. 15 to Feb. 28, and to extend the deadline for the court to approve its reorganization plan from Dec. 15 to Jan. 31.

Extending the deadline on the credit agreement gives the company financing to continue operations and pay restructuring expenses, the filing said.

Contact Molly McMillin at 316-2699-6708 or mmcmillin@wichitaeagle.com.

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