Hawker Beechcraft announced that the U.S. Bankruptcy Court for the Southern District of New York has approved the company’s motion to enter into exclusive negotiations with Superior Aviation Beijing. Approval of this motion allows Hawker Beechcraft to spend up to 45 days exclusively negotiating with Superior regarding a strategic combination that would preserve jobs and product lines.
As part of the exclusivity agreement, Superior will make payments over the next month to sustain Hawker Beechcraft’s jet business. An initial deposit of $25 million is payable before the end of the week and a second $25 million deposit is payable within 30 days. Any definitive agreement reached with Superior would be subject to approval by the Committee on Foreign Investment in the United States (CFIUS) and other regulatory agencies. In addition, any definitive agreement with Superior will be subject to termination if another potential purchaser succeeds in the mandatory competitive auction process that will be overseen by the U.S. Bankruptcy Court.
Robert S. “Steve” Miller, CEO of Hawker Beechcraft said, “The agreement we have reached with Superior provides us with funding to preserve jobs as we simultaneously negotiate a potential transaction with Superior and continue to prepare for our standalone plan described in our preliminary plan of reorganization and disclosure statement. At this time, pursuing the potential transaction with Superior is in the best interests of the company and its various stakeholders, including our creditors, our employees, our suppliers and our customers. We look forward to working toward a definitive agreement with Superior and continuing to communicate with all interested parties to explain the benefits of this proposed transaction.”
During the exclusivity period, Superior will perform confirmatory diligence while the two companies negotiate definitive documentation of the transaction. If negotiations with Superior are not concluded in a timely manner, Hawker Beechcraft will proceed with seeking confirmation of the Joint Plan of Reorganization it filed with the U.S. Bankruptcy Court on June 30, 2012, which contemplates Hawker Beechcraft emerging as a standalone entity with a more focused portfolio of aircraft. More specifically, under the Standalone Plan, the company would wind down the company’s jet-related businesses, a process that likely would have commenced already but for Superior’s compelling proposal to the company.
Hawker Beechcraft’s cases are being presided over by the Honorable Judge Stuart Bernstein of the U.S. Bankruptcy Court for the Southern District of New York. Hawker Beechcraft’s jointly administered case number is Hawker Beechcraft Inc., 12-11873.
Hawker Beechcraft’s legal representative is Kirkland & Ellis; its financial advisor is Perella Weinberg and its restructuring advisor is Alvarez & Marsal. Hawker Beechcraft entered into the exclusivity agreement in consultation with lenders holding a majority of the company’s pre-petition secured debt (Senior Secured Lenders). The Senior Secured Lenders’ legal representative is Wachtell Lipton Rosen & Katz and their financial advisor is Houlihan Lokey.
Previously on monitordaily:
Machinists Union Challenges Hawker Beechcraft Sale, Published July 17, 2012
Hawker Beechcraft Accepts $1.79B Offer From Chinese Firm, Published July 10, 2012
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