U.S. aircraft manufacturer Hawker Beechcraft Inc. revealed a bankruptcy plan that will give secured creditors major control over the business after a $1.8 billion sale plan to Superior Aviation Beijing fell through.
The firm filed a statement of disclosure in court unveiling plans to give more than 80 percent of its new equity to Centerbridge Partners, Angelo Gordon & Co, Capital Research & Management, Sankaty and other senior lenders. According to the filing, the remaining equity would be handed to senior and junior noteholders.
More than a week ago, Hawker announced that its plan to sell the firm to a Chinese company has ended. Hawker said that it would carry out a backup plan wherein creditors would get equity and unsecured debts would be wiped out.
Hawker CEO Steve Miller said at a conference on Oct. 18 that the U.S. presidential candidates bashing China probably contributed to the collapse of the sale talks.
The new plan is expected to allow the company to emerge from bankruptcy early next year. The plan still requires the approval of the creditor and the court, although the firm has stated that its major creditors support the proposal.
There are also plans to change the company name to Beechcraft Corp and leave the corporate jet business to focus on special mission, piston, turboprop, and trainer/attack aircraft.
Hawker is owned by a private equity unit of Goldman Sachs and Toronto based Onex. The company went into a rapid descent starting in 2008. In May, it filed for bankruptcy stating $2.5 billion in debt.
The bankruptcy plan includes a $530 million loan to pay off its earlier bankruptcy loan, according to court papers filed.
Republican presidential nominee Mitt Romney has promised to label China a currency manipulator if elected. During the presidential debate, he said China has been manipulating its currency value for many years. Obama said during the debate that he is tougher on China trade policy.
- Filing for bankruptcy does not simply involve filling out some legal forms. After the new bankruptcy law passed in 2005, the bankruptcy process became more complicated. So if you file for Chapter 13 bankruptcy, you need a San Antonio Chapter 13 Attorney who is familiar with the rules and system of your local court.