Hawker Sees Stand-Alone Bankruptcy Exit as Sale Collapses
By Beth Jinks, Susanna Ray and Jeffrey McCracken - Oct 18, 2012 8:36 AM ET
Hawker Beechcraft Inc., the business-jet maker partly owned by Goldman Sachs Group Inc., plans to emerge from bankruptcy as a stand-alone company after a sale to Superior Aviation Beijing Co. collapsed.
A review of strategic alternatives for Hawker’s product lines, which include civilian turboprops and military trainers, is under way, and the jet business may close “if no satisfactory bids are received,” according to a company statement today.
Hawker and Superior couldn’t agree on terms, Hawker Chief Executive Officer Steve Miller said in the statement. Superior had an agreement on a so-called stalking horse bid in July to acquire Wichita, Kansas-based Hawker for $1.79 billion, subject to higher bids at a U.S. Bankruptcy Court auction.
“We protected ourselves by obtaining a $50 million deposit from Superior that is now fully non-refundable and property of the company,” Miller said. Hawker, which is owned by Goldman and Onex Corp. (OCX), filed for Chapter 11 protection in May.
Negotiations to complete the deal stalled in part over questions about Superior’s financing, according to people familiar with the process, who asked not to be identified because the talks were private.
A team of Hawker executives and advisers that recently flew to China made little progress amid cultural and language barriers, said one of the people.
Messages left for Superior Chief Executive Officer Tim Archer in Coppell, Texas, before today’s announcement weren’t returned.
Superior’s History
Superior is 60 percent owned by Shenzong Cheng and his wife, Qin Wang, and 40 percent owned by Beijing E-Town International Investment & Development Corp., a company controlled by the Beijing municipal government. Cheng and Wang first visited Hawker in 2006, according to a statement.
Hawker sought court protection in May, citing lower demand for private jets following the recession and curbs on U.S. defense spending. The planemaker’s offerings include military trainers as well as business aircraft such the Hawker 4000 jet and King Air turboprop.
Superior was to make $50 million in payments over six weeks to keep Hawker afloat until the deal closed, the companies said in July.
The case is In re Hawker Beechcraft Inc., 12-11873, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporters on this story: Beth Jinks in New York at bjinks1@bloomberg.net; Susanna Ray in Seattle at sray7@bloomberg.net; Jeffrey McCracken in New York at jmccracken3@bloomberg.net
To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net; Jeffrey McCracken at jmccracken3@bloomberg.net
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