Hawker Beechcraft, currently under Chapter 11 bankruptcy protection, has entered into an exclusivity agreement with Superior Aviation Beijing regarding a strategic combination.  Superior Aviation Beijing, should a be completed, intends to maintain Hawker Beechcraft’s existing operations while investing substantial capital in the company across its entire business and general aviation product line.

The proposed transaction would not include Hawker Beechcraft Defense Corporation, which manufactures the T-6 trainer and AT-6 attack aircraft, which would remain a separate company.

Steve Miller, Hawker Beechcraft’s Chairman and CEO, 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.  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 percent a year for the next 10-15 years.”

The agreement provides for Superior acquiring Hawker Beechcraft for $1.79 billion, and making payments over the next six weeks to preserve on-going jet-related operations until the close of a transaction.  During the 45 day exclusivity period, Superior will undertake due diligence while the companies negotiate definitive documentation of the transaction.

Should negotiations with Superior not be completed on a timely basis, Hawker Beechcraft will seek approval of the bankruptcy court for its Joint Plan of Reorganization that filed on June 30, 2012, which contemplated Hawker Beechcraft as a stand alone operation with a smaller portfolio of aircraft offerings.

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