Bankrupt Hawker Beechcraft has signed an “exclusivity agreement” with Superior Aviation Beijing Co., Ltd., the Chinese company that purchased Superior Aviation last year, to negotiate a sale of some of the assets of Wichita-based company.
If the $1.79 billion deal goes through, Superior would take over all of Hawker Beechcraft’s general aviation operations, but Hawker Beechcraft Defense Co. would remain a separate entity, continuing to produce the T-6 trainers and pursuing final certification of the AT-6 light attack aircraft.
As part of the deal, Superior agreed to provide funding over the next six weeks to support ongoing jet-related operations, which will help Hawker Beechcraft to sustain the jet business until the close of the transaction, “preserving significant future opportunity for growth,” Hawker Beechcraft officials said in a prepared statement.
“Superior’s proposal reflects its intention to make Hawker Beechcraft its flagship investment; maintain Hawker Beechcraft’s U.S. headquarters, management team and employees; and continue product development throughout its commercial product lines,” the statement continued.
During the 45-day exclusivity period, Superior will perform due diligence while the two companies continue to negotiate the transaction. But even then, it’s not a done deal. “If the parties successfully negotiate a definitive agreement, that agreement would be subject to a further competitive public auction process,” said company officials in the prepared statement.
If the deal closes, Superior intends to maintain Hawker Beechcraft’s existing operations “while also investing substantial capital in the company and its business and general aviation product line, saving thousands of American jobs, including in Wichita, Kan. and Little Rock, Ark.,” the statement said.
“Superior has had a long-standing interest in the commercial aircraft business of Hawker Beechcraft, having first approached the company several years ago regarding a potential strategic partnership,” said Robert S. “Steve” Miller, CEO of Hawker Beechcraft. “With Superior’s previous experience operating a U.S. business and its demonstrated ability to quickly restore a business to profitability after emerging from Chapter 11, we believe a transaction with Superior would maximize value for Hawker Beechcraft and its stakeholders. Importantly, this combination would give Hawker Beechcraft greater access to the Chinese business and general aviation marketplace, which is forecast to grow more than 10% a year for the next 10-15 years. We look forward to working toward a definitive agreement.”
“The decision to move forward with Superior was based on two key factors: The bid for the company was the most attractive we received during the strategic review process and the going-forward plan offered the most continuity for our business, allowing us to preserve jobs, product lines and our ability to maintain our commitments to our customers,” added Bill Boisture, Hawker Beechcraft chairman. “Superior is committed to maintaining Hawker Beechcraft’s strong presence in the United States and retaining its current employee base and experienced management team, while positioning the company for future growth at home and abroad.”
If negotiations with Superior are not concluded in agreed-upon time, Hawker Beechcraft will proceed with seeking confirmation of the Joint Plan of Reorganization it filed with the U.S. Bankruptcy Court on June 30, which contemplates Hawker Beechcraft emerging as a standalone entity with a more focused portfolio of aircraft.
Superior officials say the company has received the full support of the City of Beijing municipal government in completing the transaction. In addition, it is working to obtain all regulatory approvals from the Chinese central government for this foreign investment project. The transaction also is subject to approval by the U.S. Committee on Foreign Investment in the United States (CFIUS) and would be subject to additional U.S. regulatory reviews and approvals. Additionally, Bankruptcy Court approval is required for Hawker Beechcraft’s agreement to negotiate exclusively with Superior and for any definitive agreement that may be negotiated with Superior.
Superior Aviation Beijing Co., Ltd. is an aerospace manufacturer that engages in the research & development, production and sale of general aviation engines and parts. Superior is 60 percent owned by Beijing Superior Aviation Technology Corporation Ltd., a closely-held private entity, and 40 percent owned by Beijing E-Town International Investment & Development Corporation Ltd., a company controlled by the Beijing municipal government that supports the financing of strategic investments in certain industries.
For more information: HawkerBeechcraft.com
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