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Hawker Beechcraft Acquired by China's Superior Aviation


Hawker Beechcraft Premier

July 10, 2012 - Hawker Beechcraft Inc. has agreed to a $1.79 billion purchase offer from Beijing-based Superior Aviation Beijing Co. Ltd., the company has announced. The deal, if approved, will allow the bankrupt aviation company to maintain existing operations and the thousands of jobs in Wichita and Little Rock, as well as injecting additional capital in the company's business and GA product line. The agreement does not include Hawker Beechcraft Defense Company (HBDC), which would remain a separate entity that produces T-6 trainers and is seeking certification of the AT-6 light attack aircraft.

"Superior has had a long-standing interest in the commercial aircraft business of Hawker Beechcraft, having first approached the company several years ago regarding a potential strategic partnership," said Robert S. "Steve" Miller, CEO of Hawker Beechcraft Inc. "With Superior's previous experience operating a U.S. business and its demonstrated ability to quickly restore a business to profitability after emerging from Chapter 11, we believe a transaction with Superior would maximize value for Hawker Beechcraft and its stakeholders. Importantly, this combination would give Hawker Beechcraft greater access to the Chinese business and general aviation marketplace, which is forecast to grow more than 10 percent a year for the next 10-15 years. We look forward to working toward a definitive agreement."

Bill Boisture, Hawker Beechcraft Corporation chairman, said Superior's bid was the most attractive received during the strategic review process and offered the most continuity for the business. "Superior is committed to maintaining Hawker Beechcraft's strong presence in the United States and retaining its current employee base and experienced management team, while positioning the company for future growth at home and abroad," he said.

According to the terms of the exclusivity agreement, Superior will acquire Hawker Beechcraft for $1.79 billion and make payments over the next six weeks to support ongoing jet-related operations, which will help Hawker Beechcraft sustain the jet business until the close of the transaction. Superior intends to make Hawker Beechcraft its flagship investment; maintain Hawker Beechcraft's U.S. headquarters, management team, and employees; and continue product development throughout its commercial product lines.

During the 45-day exclusivity period, Superior will perform confirmatory diligence while the two companies negotiate definitive documentation of the transaction. The companies expect to enter into definitive documentation prior to the conclusion of the exclusivity period. If the parties successfully negotiate a definitive agreement, that agreement would be subject to a further competitive public auction process. HBDC is not part of the proposed transaction and neither ownership nor control of HBDC will transfer to Superior. In the event that HBDC is sold, up to $400 million of the $1.79 billion purchase price will be refundable to Superior.

If negotiations with Superior are not concluded in a timely manner, Hawker Beechcraft will proceed with seeking confirmation of the Joint Plan of Reorganization it filed with the U.S. Bankruptcy Court on June 30, 2012, which contemplates Hawker Beechcraft emerging as a standalone entity with a more focused portfolio of aircraft.

The transaction is subject to approval by the U.S. Committee on Foreign Investment in the United States (CFIUS) and would be subject to additional customary U.S. regulatory reviews and approvals. Additionally, Bankruptcy Court approval is required for Hawker Beechcraft's agreement to negotiate exclusively with Superior and for any definitive agreement that may be negotiated with Superior. The proposed combination of Hawker Beechcraft and Superior will not require a financing condition.

Superior Aviation Beijing Co. Ltd. is an aerospace manufacturer that engages in the research, development, production, and sale of general aviation engines and parts. Superior is 60 percent owned by Beijing Superior Aviation Technology Corporation Ltd., a closely held private entity, and 40 percent owned by Beijing E-Town International Investment & Development Corporation Ltd., a company controlled by the Beijing municipal government that supports the financing of strategic investments in certain industries.


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