Hawker Beechcraft enters forbearance agreement with lenders
Hawker Beechcraft has announced it has reached an agreement with certain lenders that will provide the company with approximately $120 million of additional liquidity through an incremental term loan facility under its existing credit facility.
The company intends to use the proceeds of this loan to fund its ongoing operations as Hawker Beechcraft continues working with its lenders toward a comprehensive recapitalisation. As part of the agreement, lenders currently holding approximately 70 percent of Hawker Beechcraft bank debt have agreed to defer the company’s obligation to make certain interest payments on the company’s senior secured revolving and term loans when due and have granted the company relief from certain existing loan covenants. This forbearance agreement is scheduled to expire on 29 June 2012.
Robert S. (Steve) Miller, chief executive officer of Hawker Beechcraft said, “Like others in the industry, Hawker Beechcraft has been impacted by the prolonged weakness in our markets. In the last three years the company has made aggressive transformational changes in all operational functions. While these steps have been effective, the company is operating with a debt load that is restricting its ability to succeed and fully execute on its strategy. We believe this agreement will stabilize the company’s current financial position and ensure Hawker Beechcraft continues manufacturing the best airplanes for our customers and providing first-class service and support. At the same time, the agreement provides Hawker Beechcraft and its lenders with additional time and flexibility to work together to recapitalize the company and better position Hawker Beechcraft for the future. We believe this loan demonstrates confidence in the long-term value of the company.”