Hawker Beechcraft files for bankruptcy protection

Hawker Beechcraft has filed for Chapter 11 bankruptcy protection in the US after receiving approval from more than two-thirds of its creditors to begin restructuring.

The manufacturer of commercial and military small aircraft reached a voluntary agreement with most of its lenders and bondholders to wipe out USD2.5 billion in debt and USD125 million of annual interest payments. It has also secured USD400 million in funding to ensure continued payments to employees and suppliers, thereby maintaining its operations.

The proposed terms of the restructuring were announced on 3 May and will require court approval.

The company's chief executive, Robert Miller, said the restructuring plan "will dramatically improve Hawker Beechcraft's ability to compete in a rapidly changing environment".

Hawker Beechcraft was acquired from Raytheon by equity investors Goldman Sachs Capital and Onex Partners at the peak of the market in 2007 for USD3.3 billion. It previously traded as Raytheon Aircraft Company.

In March the company agreed a three-month forbearance agreement with a majority of its lenders that was expected to lead to an extra USD120 million in funding. Hawker Beechcraft has struggled in recent months to cope with competition from the likes of commercial providers Cessna and General Dynamics and defence rivals such as Brazil's Embraer. In March one of Hawker Beechcraft's main competitors, Textron, reportedly showed interest in buying parts of the company.