Hawker Beechcraft Reaches Agreement with Lenders to Reduce Debt, Strengthen Company for the Future

 Hawker Beechcraft Reaches Agreement with Lenders to Reduce Debt, Strengthen
                            Company for the Future

-- Restructuring Plan Supported by a Majority of Senior Secured Lenders and
Senior Bondholders

-- Company Initiates Voluntary Chapter 11 Process to Implement Prearranged
Restructuring

-- Senior Lenders to Provide $400 Million in DIP Financing

-- All Orders Will Be Fulfilled and Service to Customers Will Continue
Uninterrupted

PR Newswire

WICHITA, Kan., May 3, 2012

WICHITA, Kan., May 3, 2012 /PRNewswire/ -- Hawker Beechcraft, Inc. today
announced that it has reached an agreement with a significant number of its
senior secured lenders and senior bondholders on the terms of a financial
restructuring plan that will strengthen the company for the future and
eliminate approximately $2.5 billion in debt and approximately $125 million of
annual cash interest expense. To implement the terms of the prearranged
restructuring expeditiously, Hawker Beechcraft and certain of its subsidiaries
today filed voluntary petitions under Chapter 11 of the United States
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New
York. The terms of the prearranged restructuring agreement will take effect
when the company's reorganization plan is confirmed by the Court and the
Chapter 11 case is concluded.

As part of the prearranged restructuring, Hawker Beechcraft obtained a
commitment for $400 million in Debtor-in-Possession (DIP) financing, which
will enable it to continue paying employees, suppliers, vendors and others in
the normal course of business.

Robert S. (Steve) Miller, CEO of Hawker Beechcraft, Inc., said, "We are
pleased to have reached an agreement with our largest lenders and bondholders
on a solution to stabilize and improve our capital structure. In the last
three years, the company has made aggressive transformational changes in all
operational functions, and today's announcement represents the next step
forward. Restructuring our balance sheet and recapitalizing the company in
partnership with our debtholders will dramatically improve Hawker Beechcraft's
ability to compete in a rapidly changing environment."

Hawker Beechcraft continues to operate in the normal course of business and
serve its customers around the world. All orders for available products will
be fulfilled and the company's commitment to providing the best products and
service in the industry remains unchanged. Further, the company will comply
with all Department of Defense acquisition and maintenance contracts, as well
as agreements with international air forces including, but not limited to, the
recently announced sale of T-6C+ trainer aircraft to Mexico. Hawker Beechcraft
is also committed to moving forward with its bid to provide the U.S. Air Force
with the AT-6 in support of the Light Air Support contract.

Reorganization Plan

A prearranged Chapter 11 filing means the company has secured the support of a
majority of its lenders and senior bondholders for its proposed financial
restructuring prior to the Chapter 11 filing with the Court. Financial
institutions representing more than two-thirds the company's bank and senior
bond debt are parties to the agreement.

Upon confirmation by the Court and consummation of the plan, equity ownership
in Hawker Beechcraft will be transferred to holders of the company's secured
debt, bond debt and certain other unsecured creditors.

Business Continuity

Hawker Beechcraft will continue its operations without interruption and meet
its ongoing commitments to customers during the restructuring process.
Specifically, deposits and progress payments will be secure and all customer
orders for available products will be fulfilled. The company believes the size
of the DIP financing commitment will be sufficient to maintain adequate and
stable working capital and liquidity positions. The company expects to meet
its obligations to its suppliers and employees in the ordinary course during
the recapitalization process.

Miller continued, "As we have worked to develop this long-term plan to
recapitalize the company and strongly position Hawker Beechcraft for the
future, our employees have continued to build the best airplanes in the world
and provide our owners with the most comprehensive global customer support in
the industry. The protections provided by the U.S. Bankruptcy Code and the
financing commitment we have obtained put Hawker Beechcraft in a great
position to continue to do so throughout the restructuring process."

Financing

The agreement includes a commitment from certain members of the senior lender
group to provide $400 million in DIP financing, which the company expects will
ensure sufficient liquidity during the reorganization process. Upon approval,
this DIP facility will be available to fund Hawker Beechcraft's operations,
pay its suppliers and vendors, and for other corporate purposes.

Background on Chapter 11

Chapter 11 of the U.S. Bankruptcy Code allows a company to continue operating
its business and managing its assets in the ordinary course of business. The
U.S. Congress enacted Chapter 11 to encourage and enable a company to continue
to operate while restructuring its business, thereby preserving jobs and
maximizing the recovery for all its stakeholders.

Important Note

The transaction described above is subject to numerous closing conditions and
is not an offer to sell securities or a solicitation of an offer to purchase
any securities.

The company's legal representative is Kirkland & Ellis LLP, its financial
advisor is Perella Weinberg Partners LP and its restructuring advisor is
Alvarez & Marsal.

This release is not intended as a solicitation for a vote on the Plan of
Reorganization.

Hawker Beechcraft, Inc., the parent company of Hawker Beechcraft Corporation,
is a world-leading manufacturer of business, special mission, light attack and
trainer aircraft – designing, marketing and supporting aviation products and
services for businesses, governments and individuals worldwide. The company's
headquarters and major facilities are located in Wichita, Kan., with
operations in Little Rock, Ark.; Chester, England, U.K.; and Chihuahua,
Mexico. The company leads the industry with a global network of more than 100
factory-owned and authorized service centers. For more information, visit
www.hawkerbeechcraft.com.

Media contact:
Nicole Alexander
+1.316.676.3212
Nicole_Alexander@hawkerbeechcraft.com
www.hawkerbeechcraft.com 

SOURCE Hawker Beechcraft, Inc.
 
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