page_title: Hawker Beechcraft
section_title: 2010s bankruptcy and restructuring
hierarchical_section_title: Hawker Beechcraft / History / 2010s bankruptcy and restructuring
caption_attribution_description: English: Hawker 4000 (registration N7007Q, msn RC-6) on display at Farnborough Airshow 2008
context_page_description: Hawker Beechcraft Corporation was an American aerospace manufacturing company that built the Beechcraft and Hawker business jet lines of aircraft between 2006 and 2013. The company headquarters was in Wichita, Kansas, United States, with maintenance and manufacturing locations worldwide. The history of Hawker Beechcraft originated in 1994 when Raytheon merged its Beech Aircraft Corporation and Raytheon Corporate Jets units.
  In 2006, Raytheon sold the company to a consortium of Goldman Sachs and Onex Corporation. This deal left the company with a heavy burden of debt which it struggled to support from the economic crisis of 2008 onwards. In April 2012 it defaulted on interest payments and was in breach of banking covenants; this caused widespread speculation that it would enter bankruptcy.
  On May 3, 2012, the company entered bankruptcy, filing voluntary petitions under Chapter 11 in US Bankruptcy Court. The bankruptcy resulted in the company accepting an offer to be purchased by Superior Aviation Beijing.
context_section_description: In early 2010 the company, in partnership with FlightSafety International, opened a 44,000 sq ft (4,100 m²) Maintenance Learning Center, for technician training.
  By September 2011 the company had US$2.14 billion of debt outstanding. In December 2011 the company announced that it was slowing down development of the Hawker 200 jet due to the uncertain state of the economy. CEO Bill Boisture indicated the program was not canceled, saying that the aircraft program is "well positioned to continue...when the time is right." The company also announced that it was looking for relief from payments on a US$182 million revolving line of credit, due to the general poor economic conditions and low sales of light jets. The company was close to defaulting, but Sam Goodyear, an analyst at CreditSights predicted that the lenders would rearrange the debt rather than force the company to liquidate, as their return in the prevailing market conditions would be poor.
  In January 2012 the company's Beechcraft AT-6 lost out to Embraer's Tucano in a competition to supply 20 light attack jets to Afghanistan. This contract has since been cancelled due to mistakes in the paperwork and Hawker Beechcraft challenged the deal in court.
  The company underwent management changes in February 2012, with CEO Bill Boisture becoming chairman of the company's operating subsidiary Hawker Beechcraft Corp. The board of directors named company turn-around expert Steve Miller as the new CEO.
  In March 2012 the general media began carrying stories that the company would have to soon enter bankruptcy, even though the new CEO Miller had indicated he would work hard to avoid that. In February 2012 Miller had said, "My assignment is to figure out how to get through these financial headwinds without even having to think about Chapter 11 filing. Chapter 11 doesn’t do anybody any good. It’s usually not necessary." Some financial analysts indicated that with so much debt and low share prices that the owners, Onex and Goldman's share in the company may well now be zero. Some analysts indicated that bankruptcy was inevitable. Scott Chan, an analyst with Canaccord Genuity in Toronto stated, "Unless things turn around, this company could go bankrupt soon. Time is running out." Another analyst added, "I think everybody is pretty sure it’s when, not if."
  On March 27, 2012 the company struck a deal for $120m of interim financing to give it time to recapitalize the company. Lenders holding about 70 percent of its bank debt agreed to waive covenants on that debt, and defer interest payments until June 29, 2012. The following day Reuters reported rumours that the company was negotiating a prearranged bankruptcy "within the next several weeks" to include debtor-in-possession (DIP) financing of less than $500M. On March 30, the company failed to pay interest on its secured credit facility, which Standard & Poors considered a "selective default" and on April 2 it failed to pay $28 million of interest on its unsecured and subordinated notes, which S&P rated as a full default. Hawker also reported that it had breached banking covenants and had failed to file its 10-K for 2011 on time because of problems with its internal financial reporting systems.
  In April 2012 the company filed its delayed year-end report with the U.S. Securities and Exchange Commission. The filing stated that "management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern...Due to the fact that we have recurring negative cash flows from operations and recurring losses from operations, we will need to seek additional financing. There is substantial doubt that we will be able to obtain additional equity or debt financing on favorable terms, or at all, in order to have sufficient liquidity to meet our cash requirements for the next twelve months." The company reported that it had lost over US$1B in the previous two years, has US$2.3B in debt and had already missed some interest payments. The SEC filing also stated that the company might sell off assets and equity, renegot
caption: Hawker 4000
exif: {"Image Make": "OLYMPUS IMAGING CORP.", "Image Model": "SP500UZ", "Image Orientation": "Horizontal (normal)", "Image ResolutionUnit": "Pixels/Inch", "Image Software": "Version 1.1", "Image DateTime": "2008:07:15 08:15:50", "Image YCbCrPositioning": "Co-sited", "Image Rating": "0", "Image Tag 0x5012": "1", "Image ExifOffset": "1014", "Image CustomRendered": "Normal", "Image ExposureMode": "Auto Exposure", "Image WhiteBalance": "Auto", "Image DigitalZoomRatio": "0", "Image SceneCaptureType": "Standard", "Image GainControl": "None", "Image Contrast": "Normal", "Image Saturation": "Normal", "Image Sharpness": "Normal", "Image PrintIM": "[80, 114, 105, 110, 116, 73, 77, 0, 48, 51, 48, 48, 0, 0, 37, 0, 1, 0, 20, 0, ... ]", "Thumbnail ResolutionUnit": "Pixels/Inch", "Thumbnail JPEGInterchangeFormat": "3518", "Thumbnail JPEGInterchangeFormatLength": "1504", "EXIF ExposureTime": "1/400", "EXIF FNumber": "4", "EXIF ExposureProgram": "Program Creative", "EXIF ISOSpeedRatings": "80", "EXIF ExifVersion": "0221", "EXIF DateTimeOriginal": "2008:07:15 08:15:50", "EXIF DateTimeDigitized": "2008:07:15 08:15:50", "EXIF ComponentsConfiguration": "YCbCr", "EXIF CompressedBitsPerPixel": "2", "EXIF ExposureBiasValue": "0", "EXIF MaxApertureValue": "297/100", "EXIF MeteringMode": "Pattern", "EXIF LightSource": "Unknown", "EXIF Flash": "Flash did not fire, compulsory flash mode", "EXIF FocalLength": "149/10", "EXIF FlashPixVersion": "0100", "EXIF ColorSpace": "sRGB", "EXIF ExifImageWidth": "2816", "EXIF ExifImageLength": "2112", "EXIF FileSource": "Digital Camera", "EXIF SceneType": "Directly Photographed"}