Bill Boisture: “Beechcraft leaving Chapter 11 as stronger company”
As Hawker Beechcraft leaves Chapter 11 protection as the newly-renamed Beechcraft Corporation, CEO Bill Boisture says the company is stronger than ever.
Beechcraft, which replaces Hawker Beechcraft, has today emerged from Chapter 11. The new company is focused on selling Beechcraft, military and trainer aircraft and supporting both Hawker and Beechcraft aircraft. It is looking to sell the Hawker production division.
“We are emerging as a much stronger company. We have cut costs and restructured. We are in a much stronger position now and I am focused on getting the good news to our staff, our customers and prospects, and to our key suppliers that have worked with us through the process,” said Bill Boisture, CEO of Beechcraft in an interview with Corporate Jet Investor. “We are emerging with a balance sheet that enables us to have a stable future and compete internationally.”
He says a small group of people are working on the sale of Hawker assets and that the board of Beechcraft Corporation will formally appoint advisers to manage the sale.
Hawker Beechcraft filed for Chapter 11 bankruptcy protection in May 2012. The company was struggling to pay $125 million of annual interest on the $2.5 billion of debt that had been used to acquire the company.
Beechcraft has $600 million in permanent financing, including a $425 million term loan facility and a $175 million revolving facility. Some of the term loan was used to repay its debtor-in-possession credit facility and pay other restructuring costs. JP Morgan and Credit Suisse were joint lead arrangers and joint bookrunners.
As well as stopping production of Hawker aircraft, Beechcraft has also cut staff and closed three service centres, leaving it with 10 worldwide. Although the company has been renamed as Beechcraft, the customer services division will continue to be called Hawker Beechcraft Services and support both Hawker and Beechcraft aircraft. It remains committed to the Hawker 400XPR and Hawker 800XPR upgrade programmes.
With the company now out of bankruptcy protection Boisture is focusing on new sales. He says they are excited about winning a launch customer for the AT-6 Light Attack Aircraft and developing new products. He believes that it was harder to win large government project when the company was in bankruptcy.
Boisture believes that Chapter 11 did stop some commercial buyers in the last half of 2012 but has not harmed the Beechcraft brand.
He also says that the company will launch new products. “The restructured company has three times as much to spend on Beechcraft research and development as it did before,” says Boisture. “So all our resources and talent can go on Beechcraft.”
Beechcraft also hopes to finish implementing a new SAP system that it has been working on since 2011.
“Toughest days are behind us”
Boisture recognises that Chapter 11 has been unsettling for employees, suppliers and customers. He says that Beechcraft customers were concerned when Hawker Beechcraft withdrew warranties from Hawker 4000 and Premiair aircraft.
“Chapter 11 is a rough place and tough things happen,” he says. “Customers were concerened and it created a shadow of uncertainty. But it was a temporary situation and didn’t damage Beechcraft in the long term.”
He also acknowledges how unsettling the process has been for the company’s staff and praises the union’s positive role in the process.
“I am very proud of our people and of the company. There are a lot of unknowns involved with Chapter 11 and it has been a very tough process. Our employees and unions had both personal and professional apprehensions about the process but they focused on doing their jobs properly and building high quality aircraft,” says Boisture.“I am proud we have made it through the tough times and we are ready for one markets improve. We went through it together.
The Beechcraft restructuring team
Legal representative: Kirkland & Ellis
Financial advisor: Perella Weinberg Partners
Restructuring advisor: Alvarez & Marsal
Senior Secured Lenders’ legal representative: Wachtell, Lipton, Rosen & Katz.
Senior Noteholders’ legal representive: Milbank, Tweed, Hadley & McCloy LLP
Senior Noteholders’ financial advisor: Blackstone.
Unsecured Creditors Committee’s legal representative: Akin
Robert (Bob) Johnson is the Chairman of the company’s new board. Its other members are: General Donald G. ‘Don’ Cook, Gene Davis, Ralph Heath, David Tolley, Gideon Argov, Mark Ronald, Paul Fulchino and Bill Boisture.