Goldman Sachs’s Hawker Files Reorganization Plan

Hawker Beechcraft Inc., the private- jet maker owned by Goldman Sachs Group Inc. (GS) and Onex Corp. (OCX), filed a plan to reorganize that would give control of the company to secured creditors.

Holders of secured debt valued at $921.6 million would get 81 percent of the new common stock in the reorganized company, according to the plan filed in U.S. Bankruptcy Court in Manhattan June 30. Estimated recoveries for unsecured creditors and holders of subordinated notes weren’t disclosed.

Other interests in the company would be canceled, Hawker said, leaving nothing for existing shareholders, including funds affiliated with New York-based Goldman Sachs and Onex. Each owned 49 percent of Hawker stock. Former managers and directors held the remainder, according to court papers.

The company, based in Wichita, Kansas, indicated it would borrow an unspecified amount to exit court protection and repay a $400 million loan that financed operations while in bankruptcy.

“With a sustainable capital structure aligned with the debtors’ revised business plan and adequate operating liquidity, the reorganized debtors will be positioned to compete more effectively,” Hawker said in court papers.

Debt Reduced

From the outset of its Chapter 11 case on May 3, the majority of Hawker’s noteholders had agreed to a rough plan that would reduce its $2.6 billion in debt. The company’s initial proposal drew support from more than two-thirds of its lenders and senior bond debt holders.

Goldman Sachs Capital Partners, the fifth-biggest U.S. bank’s private-equity arm, and Toronto-based Onex bought Hawker in 2007 for $3.3 billion. Hawker reported net losses totaling more than $900 million in the past two years as U.S. military contracts and plane sales declined.

Hawker’s aircraft include the Hawker 4000 business jet and the Beechcraft King Air propjet. Sales last year fell 13 percent from a year earlier to $2.4 billion.

Affiliates of GS Capital Partners VI LP and Onex Partners II LP own about $159.4 million of Hawker notes, according to an April filing with the Securities and Exchange Commission.

The case is In re Hawker Beechcraft Inc., 12-11873, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Tiffany Kary in New York at tkary@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net

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