Hawker Beechcraft has received approval from a U.S. bankruptcy court to reorganize as a smaller, stand-alone company that will focus on the market for turboprop and piston airplanes.
The plan calls for the company to emerge from bankruptcy under the name Beechcraft Corp. in February with a renewed emphasis on its King Air, Baron, Bonanza and T-6 Texan II light attack aircraft as well as its profitable parts, maintenance, repairs and refurbishment businesses.
As expected, the plan will include a selloff of the company’s business jet line, which has suffered from slow sales in recent years.
The bankruptcy will allow the new Beechcraft to shed $2.5 billion in debt and fund new aircraft programs, the first of which could be a single-engine King Air turboprop that would use the fuselage from the Premier I light business jet.
After emerging from bankruptcy, Beechcraft will secure new financing of at least $525 million in the form of a term loan and revolving line of credit, the company announced on Wednesday. The loan and line of credit will be used to fund operations, as well as to repay the $400 million in credit the company received at the time it entered bankruptcy to stay afloat.
The Wichita company opted to emerge from bankruptcy as a smaller company after a deal by China-based Superior Aviation Beijing fell apart in October.