Hawker Beechcraft said Friday that its key creditors had voted overwhelmingly to approve the company’s plan for reorganization.
The company, which declared Chapter 11 bankruptcy May 3, said in a news release that the creditors, voting in a solicitation process that is part of the bankruptcy, “have overwhelmingly approved its proposed Joint Plan of Reorganization.”
The company also announced that J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC have agreed to act as joint lead arrangers and joint bookrunners to structure, arrange and syndicate $600 million in exit financing, consisting of a term loan and a revolving line of credit.
The news release said affiliated banks of the joint lead arrangers, JPMorgan Chase Bank, N.A. and Credit Suisse AG, have committed to underwrite the financing. The financing will be used to repay all claims under the debtor-in-possession post-petition credit facility, pay certain settlement and cure payments and fund ongoing operations. The financing is subject to, among other things, completion of definitive financing documentation and Bankruptcy Court approval.
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In a statement, Steve Miller, CEO of Hawker Beechcraft, Inc., said, “The tremendous show of support of our creditors for the Plan, which will dramatically reduce Hawker Beechcraft’s debt load, and the financing commitment from JPMorgan and Credit Suisse mark an important milestone for the company as it moves closer to emerging from the restructuring process.”
Hawker Beechcraft will seek approval from the Court to exit bankruptcy at the confirmation hearing set for Jan. 31. It expects to emerge from Chapter 11 in the second half of February.
Upon emergence, pre-petition secured bank debt, unsecured bond debt, and certain general unsecured claims will be canceled and holders of such claims will receive equity in the reorganized company in the percentages negotiated by the major creditor groups at the time the company commenced its Chapter 11 proceedings, according to the news release. A new board of directors, to be appointed by the new owners of the company, will take over on the date of emergence.