Aviation

January 31, 2014

Textron secures loans to acquire Beechcraft

Textron, the parent company of Cessna Aircraft, has lined up funding to buy Beechcraft Corp., according to the company’s filings with the Securities and Exchange Commission.

Textron, the parent company of Cessna Aircraft, has lined up funding to buy Beechcraft Corp., according to the company’s filings with the Securities and Exchange Commission.

Textron has secured a loan agreement with JPMorgan Chase Bank, Citibank, Bank of America, the Bank of Tokyo-Mitsubishi and other lenders for $500 million.

The company can draw on the loan until July 24, 2014, the SEC filing said.

It has also issued and sold notes totaling $250 million due 2021, and for $350 million due 2024.

If Textron’s acquisition of Beechcraft is not completed before the end of 2014, Textron will be required to redeem the outstanding 2021 notes at a redemption price equal to 101 percent plus accrued and unpaid interest, the filing said.

If the deal is not completed, the net proceeds from the offering of the 2024 notes would be used for general corporate purposes, the filing said.

On Dec. 26, Textron entered into an agreement to acquire Beech Holdings, the parent company of Beechcraft Corp., for $1.4 billion in cash.

When the deal was announced, company officials said they expected it to close by July 1.

The agreement contains termination provisions, including the right of each company to terminate the agreement if regulatory approvals have not been secured and the deal has not been completed by July 24, according to the SEC filing.

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