Hawker Beechcraft said Tuesday it has reached a short-term agreement with lenders for $120 million and to defer interest payments on some of its loans.
The Wichita-based business jet maker said the additional funds will be used for operations while it works on a recapitalization plan with its lenders.
In addition to providing the company with extra liquidity, the forbearance agreement permits Hawker to defer certain interest payments to lenders that hold about 70 percent of Hawker’s bank debt, the company said.
The agreement was made with Centerbridge Partners, Angelo Gordon & Co. and Capital Research & Management. It is scheduled to expire on June 29, the company said.
Hawker Beechcraft CEO Steve Miller said in a news release that despite changes the company has made in the past three years to become more efficient and profitable, its debt load “is restricting its ability to succeed and fully execute on its strategy.”
“We believe this agreement will stabilize the company’s current financial position and ensure Hawker Beechcraft continues manufacturing the best airplanes for our customers.”
A Hawker spokeswoman said Miller was not available for comment on Tuesday. Hawker brought in Miller in February to engineer a turnaround. He helped oversee the bankruptcy of Delphi Corp. and Federal-Mogul Corp., and helped in Chrysler Corp.’s return to profitability. In 2008, Miller wrote a book called “The Turnaround Kid: What I Learned Rescuing America’s Most Troubled Companies.”
Hawker is faced with severe cash-flow problems; in an earlier Eagle story, several analysts keyed on whether Hawker would pay a $28.3 million interest payment due next week. Those analysts said it was possible that Hawker would file for Chapter 11 bankruptcy protection this year.