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Hawker deal with Chinese backer falls through; company may stop making jets

19-10-2012

Hawker Beechcraft has ended talks with a Chinese joint venture over what would have been a $1.8 billion buyout of the bankrupt American company. Officials blamed a number of complex issues and said that the political climate surrounding China in the U.S. presidential election may have played a role in souring the tone of the talks. Hawker now plans to emerge from bankruptcy as a new company, Beechcraft Corp., which would focus on piston and turboprop aircraft, along with military projects. Most notably, the company said it would likely shut its business jet lines for good; it plans to find a bidder for those parts of its business so that it can repay its creditors. Hawker Beechcraft was struggling under a $2.5 billion debt load after the 2007 buyout of the company by a group of investors. Since entering bankruptcy in May, the company floated several restructuring plans, most of which would have pared back business jet production. But this week’s announcement to end jet production altogether came with few other details, such as who would support the company’s existing fleet of business jets. A bankruptcy court hearing on the plan is scheduled for next month.

http://www.reuters.com/article/2012/10/18/us-hawkerbeechcraft-bankruptcy-idUSBRE89H1LA20121018