Hawker Beechcraft Inc., which filed for Chapter 11 bankruptcy on May 3, will remain intact, Executive Vice President Shawn Vick said.
“This is not chapter 7, this is not the break-up of the company,” Vick said at a press conference in Geneva today.
It is “highly likely” that the Wichita-based maker of Beechcraft King Air turboprops and Hawker 4000 and 900XP jets will exit Chapter 11 before the year end, Vick said, citing the firm’s financial advisers. Vick also said other companies may be interested in acquiring Hawker Beechcraft.
Hawker was bought for $3.3 billion in 2007 by Goldman Sach Group Inc. and Onex Corp. The jet-maker filed for bankruptcy on May 3 as crippling debts incurred from the company’s takeover combined with stalling corporate jet sales. Two-thirds of the 2007 purchase was financed with debt, Vick said. The company reported net losses totalling more than $900 million over the past two years as U.S. military contracts and plane sales declined.
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Goldman Sachs and Onex announced a plan earlier this month to transfer their equity to holders of Hawker’s debt, eliminating $2.5 billion in borrowings in the process. Hawker now has “no debt impairments,” Vick said, and is freed from $125 million of annual interest payments.
Hawker competes with Cessna Aircraft Co, Embraer SA, Gulfstream Aerospace Corp. and Bombardier Inc. to supply business jets in the mid- and light-aircraft categories.