Beechcraft Emerges from Chapter 11 a Stronger Global Company
Company formally secures long-term financing, ends bankruptcy process
WICHITA, Kan. (Feb. 19, 2013) – Beechcraft, formerly Hawker Beechcraft, announced today it has formally emerged from the Chapter 11 process as a new company well-positioned to compete vigorously in the worldwide business aviation, special mission, trainer and light attack markets.
The company’s Joint Plan of Reorganization (Plan) was approved by the U.S. Bankruptcy Court for the Southern District of New York on Feb. 1, 2013, and became effective on Feb. 15, 2013. Beechcraft exits the restructuring process with a dramatically reduced debt load, a stable, restructured balance sheet and the support of a well-capitalized shareholder base.
“Today marks the rebirth of an 80-year-old American aircraft manufacturing business with a globally recognized brand. Beechcraft has emerged from this process a stronger company with both financial and operational strength and stability,” said Bill Boisture, Chief Executive Officer of Beechcraft. “We have a strong line of versatile and globally renowned products like the King Air turboprop and the T-6 military trainer aircraft, and the largest global customer support network in the industry. Our highly skilled and dedicated work force is focused on building aircraft of exceptional quality and reliability. With these elements as our foundation for the future, we will compete worldwide and we will win.
“I would like to thank our employees for their hard work and focus, and our union partner, key creditors, elected officials, suppliers and customers for their strong support throughout this process,” Boisture added.
Beechcraft’s product portfolio includes the King Air family of the 350i, 250 and C90GTx. The worldwide fleet of more than 7,000 King Air turboprops serves a wide variety of missions and has amassed more than 50 million flight hours while operating in 115 countries around the world. Its piston-engine Bonanza G36 and Baron G58 twin continue to represent the pinnacle of high-performance, six passenger capability for their class. A global fleet of nearly 25,000 Baron and Bonanza aircraft also serve as an entry level platform for the King Air line. The company’s defense products include the proven T-6 military trainer that touts a worldwide fleet of nearly 800 aircraft and more than 2.1 million flight hours, along with the newly introduced multi-role AT-6 for the Light Attack mission.
The company’s Global Customer Support (GCS) team and its factory-owned service center network, Hawker Beechcraft Services, will continue supporting all Hawker and Beechcraft products. The network includes 10 facilities in the United States, Mexico and the United Kingdom, along with more than 90 authorized service centers around the world. The GCS team is dedicated to improving the value of Hawker and Beechcraft aircraft by employing products and services to simplify ownership, reduce operating cost and increase resale value. Two examples of this include the factory designed, engineered and supported Hawker 400XPR and Hawker 800XPR jet programs in which the company is offering owners the opportunity to upgrade engines, avionics and aerodynamics on their current aircraft.
Corporate Governance, Financing and Ownership
Robert (Bob) Johnson is the Chairman of the company’s new board. Its other members are: General Donald G. ‘Don’ Cook, Gene Davis, Ralph Heath, David Tolley, Gideon Argov, Mark Ronald, Paul Fulchino and Bill Boisture. The company’s leadership team remains in place, providing continuity and stability in running the business.
As previously announced, Beechcraft secured $600 million in permanent financing, including a $425 million term loan facility and a $175 million revolving facility. A portion of the term loan facility was used to repay the company’s debtor-in-possession credit facility and to satisfy certain settlement and cure costs payable under the Plan. The remainder, together with the revolving facility, is funding ongoing operations. J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC acted as joint lead arrangers and joint bookrunners to structure, arrange and syndicate the financing.
As detailed in the Plan, effective on Feb. 15, 2013, pre-petition secured bank debt, unsecured bond debt, and certain general unsecured claims have been canceled and holders of such claims received equity in the reorganized company in the percentages negotiated by the major creditor groups at the time the company commenced its Chapter 11 proceedings.
The company’s legal representative is Kirkland & Ellis LLP; its financial advisor is Perella Weinberg Partners LP; and its restructuring advisor is Alvarez & Marsal. The Ad Hoc Committee of Senior Secured Lenders’ legal representative is Wachtell, Lipton, Rosen & Katz. The Ad Hoc Committee of Senior Noteholders’ legal representive is Milbank, Tweed, Hadley & McCloy LLP and its financial advisor is Blackstone. The Unsecured Creditors Committee’s legal representative is Akin Gump Strauss Hauer & Feld LLP and its financial advisor is FTI Consulting, Inc.
Beechcraft designs, builds and supports versatile and globally renowned aircraft, including the King Air turboprops, piston-engine Baron and Bonanza, and the T-6 trainer and AT-6 light attack military aircraft. Its 5,400 highly skilled employees are focused on continuously improving the company’s products and services which are sold to individuals, businesses and governments worldwide. In business since 1932, Beechcraft has built more than 54,000 aircraft and more than 36,000 continue flying today. It leads the industry with a global network of more than 90 factory-owned and authorized service centers. The company’s headquarters and major manufacturing facilities are located in Wichita, Kan. For more information, visit beechcraft.com or follow us on Twitter @Beechcraft.