Hawker Beechcraft announced on Thursday that it has broken off talks with a possible Chinese buyer and will seek to dispose of the Hawker jet line as it attempts to emerge from bankruptcy protection as a standalone company.
The announcement ends three months of negotiations with Superior Aviation Beijing, a Chinese aviation parts supplier and kit-built helicopter manufacturer that had tentatively agreed in early July to buy Hawker Beechcraft for $1.8 billion.
In early September, Hawker Beechcraft chairman Bill Boisture told Flightglobal that a final agreement with Superior Aviation Beijing was imminent. However, the Chinese company ultimately did not propose terms that were acceptable to Hawker Beechcraft, says chief executive Robert Miller.
Instead, Hawker Beechcraft will keep a $50 million deposit made by Superior Aviation Beijing that initiated the exclusive negotiations, Miller says.
Meanwhile, Hawker Beechcraft will seek to emerge from Chapter 11 bankruptcy protection later this year with a new business plan focused on its turboprop, piston, special mission and trainer/attack aircraft.
The plan to be submitted to the US Bankruptcy Court for the Southern District of New York is deliberately concentrated on bolstering the legacy Beechcraft product line, which includes the Super King Air 350 and T-6 Texan II. These are now the "most profitable products", Hawker Beechcraft says, along with a high-margin support business that offers "high growth potential".
The post-bankruptcy company will be re-named simply Beechcraft.
Company executives are now evaluating how to dispose of the legacy Hawker business, which includes the Hawker 4000, 950 and 200 business jets that are still in production. The review could result in a sale of the business, or even the "closure of the entire jet business if no satisfactory bids are received", Hawker Beechcraft says.
The decision to dispose of Hawker would sever the 18-year-old merger of what was then Beech Aircraft and Raytheon Corporate Jets, which had acquired the British Aerospace BAe 125 production - originally known as the Hawker Siddeley HS.125 - a year before.
Raytheon sold its aircraft manufacturing division in March 2007 to Hawker Beechcraft, a company formed by GS Capital Partners and Onex Partners.
In May 2012, Hawker Beechcraft filed for bankruptcy protection and two months later entered into exclusive negotiations with Superior Aviation Beijing.