WICHITA, Kan. (AP) – Aircraft maker Hawker Beechcraft is narrowing down a list of potential buyers as part of its plan to emerge from bankruptcy reorganization.
In a disclosure statement filed over the weekend with its preliminary reorganization plan, Hawker Beechcraft said that along with investment banker Perella Weinberg Partners it developed a list of more than 35 possible buyers and investors in the months preceding its May 3 filing for Chapter 11, The Wichita Eagle reported Tuesday (
That list has been pared several times since, and talks have produced eight bids, according to the filing. Perella asked six bidders last month to send revised proposals.
The pre-arranged restructuring agreement filed by Hawker Beechcraft in May is intended to reduce the company’s total funded debt of more than $2.5 billion. The company said at the time that more than two-thirds of its largest secured lenders and bondholders had agreed to the plan.
Hawker Beechcraft struggled like other aircraft makers from a general downturn in the business jet industry. The recession hit not long after Goldman Sachs and Onex Partners bought the company in 2007 from Raytheon Inc.
“Since the restructuring process began, we have been guided by a single goal: to emerge from Chapter 11 in the strongest possible operational and financial position while preserving as many jobs as possible,” company CEO Steve Miller and chairman Bill Boisture said in a letter to employees Monday. “That remains our focus. Your continued focus on designing, manufacturing and servicing the best airplanes in the world is critical to achieving that goal.”
The preliminary reorganization plan was filed in bankruptcy court in New York on Saturday, one day after Hawker Beechcraft issued 60-day layoff notices to 125 Wichita employees. Those notices bring the total number of job cuts at the Wichita plant to 906 so far this year, reducing employment in the city to fewer than 4,100.
In its disclosure statement, the company said it has worked before and after the bankruptcy filing to market itself to “incumbent and third party potential plan sponsors or acquirers.” But no decisions on whether to pursue a sale have been made, it said.
From the initial pool of possible buyers, Perella contacted 15 based on strategic fit, financial capability and other considerations, according to the filing. The 15 included three domestic and 12 international parties; of those, 13 were “strategic,” meaning they have some active involvement in the aircraft industry, and two were potential “financial” buyers, which could mean investment firms.
The Eagle reported that Hawker Beechcraft gave 10 of the parties confidential access to financial documents. Meetings were held in Wichita with five potential buyers, and officials of Hawker Beechcraft and Perella met with four others in their “home countries,” according to the filing.
In December 2010, Hawker Beechcraft was granted $45 million in incentives from the city and state based on a commitment to keep 4,000 people employed in Wichita over 10 years. However, cash payments from the incentives aren’t reduced unless the work force falls to below 3,600.
Information from: The Wichita Eagle,
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