Beechcraft Emerges from Bankruptcy with New Focus
Officially out of bankruptcy after a tough 10-month stretch, Beechcraft will now shift its focus to reestablishing its battered brand, supporting its customers and developing new piston and turboprop airplanes as the foundation of the company’s future.
“Today marks the rebirth of an 80-year-old American aircraft manufacturing business with a globally recognized brand,” said Beechcraft CEO Bill Boisture. “Beechcraft has emerged from this process a stronger company with both financial and operational strength and stability.”
The shift in focus away from business jet manufacturing allows the company to exit bankruptcy with a reduced debt load and better positioned to compete in special mission, trainer and light attack airplane markets while retaining its turboprop King Air, Baron and Bonanza line of airplanes, Boisture said. The company hopes to sell the assets of its shuttered business jet line by mid-year.
The exit from bankruptcy comes a little more than two weeks after a New York judge gave final approval to the company’s reorganization plan. Beechcraft is now owned by the financial institutions that were its secured creditors during the bankruptcy. The largest creditors are Angelo, Gordon & Co., Capital Research & Management, Centerbridge Partners LP and Sankaty Advisors, a division of Bain Capital.
Each lender forgave the money owed them in return for an equity stake in the new Beechcraft. Onex Partners and Goldman Sachs GS Capital Partners, the pre-bankruptcy majority owners of Hawker Beechcraft, retain a small percentage of equity in the new company.
Beechcraft moves forward with $225 million in net debt versus the $2.5 billion that had put a chokehold on the previous company, Hawker Beechcraft. The new company has secured $600 million in exit financing that includes a combination of term debt and revolving credit. The term debt will be drawn down to pay court-approved claims and what remains will go toward operating capital, the company said.
Beechcraft’s product portfolio now includes the King Air family of the 350i, 250 and C90GTx, the Beech Baron G58, Bonanza G36 and T-6 military trainer. After issuing layoff notices to 1,000 employees in 2012, the company now has 3,300 workers in Wichita and about 2,100 more worldwide.