Flights of fancy

10 Jul 2012 By John Foley Follow @johnsfoley

A Chinese bidder for the jet maker is offering a heroic price, and could save thousands of U.S. jobs. But Chinese state backing could be a sticking point. All hinges not just on the foreign investment regulator, but whether a bankruptcy court thinks the deal can fly politically.

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Hawker Beechcraft, the bankrupt maker of aeroplanes, struck a deal with Superior Aviation Beijing, a state-backed Chinese aerospace manufacturer, to buy the heavily indebted company for $1.8 billion. Hawker has around $2.5 billion of debt.
The deal would see Hawker’s military division, which supplies training planes to the U.S. air force and navy, separated from the main business. If the military division were successfully sold on, Superior would receive a rebate of up to $400 million.
Superior also pledged to preserve the company’s existing operations in Wichita, Kansas, and save “thousands of American jobs”. Hawker received an offer of $30 million from the Kansas state government in 2010, conditional on keeping 4,000 jobs in the region.
Hawker’s main equity investors before it filed for bankruptcy protection in May were Goldman Sachs Capital Partners and Onex Corp. As of December 2011, an entity connected with the shareholders also owned $159 million of Hawker’s debt.
(Correction: Figures for adminstrative costs and research have been corrected in paragraph 3 of the view)

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