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Hawker Beechcraft: Difference between revisions
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In March 2012, the general media began carrying stories that the company would have to soon enter bankruptcy, even though the new CEO Miller had indicated he would work hard to avoid that. In February 2012 Miller had said, "My assignment is to figure out how to get through these financial headwinds without even having to think about Chapter 11 filing. Chapter 11 doesn’t do anybody any good. It’s usually not necessary." Some financial analysts indicated that with so much debt and low share prices that the owners, Onex and Goldman's share in the company may well now be zero. Some analysts indicated that bankruptcy was inevitable. Scott Chan, an analyst with Canaccord Genuity in Toronto stated, "Unless things turn around, this company could go bankrupt soon. Time is running out." Another analyst added, "I think everybody is pretty sure it’s when, not if."<ref name="McMillin11Mar12">{{cite news|url = http://www.kansas.com/2012/03/11/2250991/analysts-watch-for-hawker-beechcrafts.html|title = Analysts watch for Hawker Beechcraft's next move Some say filing for bankruptcy is "when, not if."|access-date = March 13, 2012|last = McMillin|first = Molly|date = March 11, 2012|work = [[Wichita Eagle]]|archive-date = August 8, 2012|archive-url = https://web.archive.org/web/20120808092933/http://www.kansas.com/2012/03/11/2250991/analysts-watch-for-hawker-beechcrafts.html|url-status = dead}}</ref> | In March 2012, the general media began carrying stories that the company would have to soon enter bankruptcy, even though the new CEO Miller had indicated he would work hard to avoid that. In February 2012 Miller had said, "My assignment is to figure out how to get through these financial headwinds without even having to think about Chapter 11 filing. Chapter 11 doesn’t do anybody any good. It’s usually not necessary." Some financial analysts indicated that with so much debt and low share prices that the owners, Onex and Goldman's share in the company may well now be zero. Some analysts indicated that bankruptcy was inevitable. Scott Chan, an analyst with Canaccord Genuity in Toronto stated, "Unless things turn around, this company could go bankrupt soon. Time is running out." Another analyst added, "I think everybody is pretty sure it’s when, not if."<ref name="McMillin11Mar12">{{cite news|url = http://www.kansas.com/2012/03/11/2250991/analysts-watch-for-hawker-beechcrafts.html|title = Analysts watch for Hawker Beechcraft's next move Some say filing for bankruptcy is "when, not if."|access-date = March 13, 2012|last = McMillin|first = Molly|date = March 11, 2012|work = [[Wichita Eagle]]|archive-date = August 8, 2012|archive-url = https://web.archive.org/web/20120808092933/http://www.kansas.com/2012/03/11/2250991/analysts-watch-for-hawker-beechcrafts.html|url-status = dead}}</ref> | ||
On March 27, 2012, the company struck a deal for $120m of interim financing to give it time to recapitalize the company.<ref name=Bloomberg20120327/> Lenders holding about 70 percent of its bank debt agreed to waive covenants on that debt, and defer interest payments until June 29, 2012.<ref name=Bloomberg20120327/> The following day | On March 27, 2012, the company struck a deal for $120m of interim financing to give it time to recapitalize the company.<ref name=Bloomberg20120327/> Lenders holding about 70 percent of its bank debt agreed to waive covenants on that debt, and defer interest payments until June 29, 2012.<ref name=Bloomberg20120327/> The following day Reuters reported rumours that the company was negotiating a prearranged bankruptcy "within the next several weeks" to include debtor-in-possession (DIP) financing of less than $500M.<ref>{{cite news | url=https://www.reuters.com/article/us-hawkerbeechcraft-idUSBRE82R19K20120328 | title=Exclusive: Hawker Beechcraft readies bankruptcy filing | first1=Soyoung | last1= Kim | first2=Andrea | last2=Shalal-Esa | publisher=Reuters | date=March 28, 2012}}</ref> On March 30, the company failed to pay interest on its secured credit facility, which Standard & Poors considered a "selective default" and on April 2 it failed to pay $28 million of interest on its unsecured and subordinated notes, which S&P rated as a full default.<ref name=SP20120403>{{cite news | url=https://www.reuters.com/article/idUSWNA416020120403 | publisher=Reuters |title=TEXT-S&P cuts Hawker Beechcraft rating to 'D' | date=April 3, 2012}}</ref> Hawker also reported that it had breached banking covenants and had failed to file its 10-K for 2011 on time because of problems with its internal financial reporting systems.<ref name=SP20120403 /> | ||
In April 2012, the company filed its delayed year-end report with the [[U.S. Securities and Exchange Commission]]. The filing stated that "management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern...Due to the fact that we have recurring negative cash flows from operations and recurring losses from operations, we will need to seek additional financing. There is substantial doubt that we will be able to obtain additional equity or debt financing on favorable terms, or at all, in order to have sufficient liquidity to meet our cash requirements for the next twelve months." The company reported that it had lost over US$1B in the previous two years, had US$2.3B in debt and had already missed some interest payments. The SEC filing also stated that the company might sell off assets and equity, renegotiate its debt and may have to enter [[Chapter 11 bankruptcy]] to resolve its problems. CEO Miller stated that the company will "decide on a path forward for Hawker Beechcraft that will include a plan that will put the company on firm financial footing and better position Hawker Beechcraft for the future."<ref name="Niles14Apr12">{{cite news|url = http://www.avweb.com/avwebflash/news/Hawker_Beech_Warns_Shareholders_206523-1.html|title = Hawker Beech Warns Shareholderse|access-date = April 15, 2012|last = Niles|first = Russ|date = April 14, 2012| work = AVweb}}</ref> | In April 2012, the company filed its delayed year-end report with the [[U.S. Securities and Exchange Commission]]. The filing stated that "management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern...Due to the fact that we have recurring negative cash flows from operations and recurring losses from operations, we will need to seek additional financing. There is substantial doubt that we will be able to obtain additional equity or debt financing on favorable terms, or at all, in order to have sufficient liquidity to meet our cash requirements for the next twelve months." The company reported that it had lost over US$1B in the previous two years, had US$2.3B in debt and had already missed some interest payments. The SEC filing also stated that the company might sell off assets and equity, renegotiate its debt and may have to enter [[Chapter 11 bankruptcy]] to resolve its problems. CEO Miller stated that the company will "decide on a path forward for Hawker Beechcraft that will include a plan that will put the company on firm financial footing and better position Hawker Beechcraft for the future."<ref name="Niles14Apr12">{{cite news|url = http://www.avweb.com/avwebflash/news/Hawker_Beech_Warns_Shareholders_206523-1.html|title = Hawker Beech Warns Shareholderse|access-date = April 15, 2012|last = Niles|first = Russ|date = April 14, 2012| work = AVweb}}</ref> | ||