Onex Chairman of the Board, President, and Chief Executive Officer Gerald Schwartz speaks at their annual general meeting for shareholders in Toronto, May 6, 2010.MARK BLINCH/Reuters
After a lengthy nosedive, Hawker Beechcraft appears to be finally coming in for its crash landing.
Following months of speculation that the business jet maker won't be able to turn itself around, Reuters is reporting that Hawker is preparing a bankruptcy filing. Hawker was acquired in a $3.3-billion (U.S.) private equity buyout back in 2007, and its owners are Onex Partners and Goldman Sachs.
Both Onex and Goldman put up about $500-million (U.S.) to complete the deal.
Earlier this week, the company announced it has secured $120-million in new loans to provide some breathing room while it tries to get its balance sheet in order. To do this, major debtholders had to allow the firm to break some debt covenants as well as defer some interest payments.
Hawker has tried to turned things around, but the company has simply continued to lose altitude. In February Steve Miller, a turnaround specialist, was named as the new CEO, and a financial adviser was hired back in December. Since things, things haven't improved.
It's long been known that Hawker was in trouble. The buyout was struck just before the Great Recession, and business jets weren't exactly the hottest commodity when financial markets tumbled. The situation hasn't gotten progressively worse, and a month ago analysts had gone so far as to say that the company's net asset value was worth $0.
Tim Kiladze