Bill Boisture, Chairman of Hawker Beechcraft Corporation, said, “The decision to move forward with Superior was based on two key factors: the bid for the company was the most attractive we received during the strategic review process and the going-forward plan offered the most continuity for our business, allowing us to preserve jobs, product lines and our ability to maintain our commitments to our customers. 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.” 

Under the terms of the 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 to sustain the jet business until the close of the transaction, thus preserving significant future opportunity for growth. Superior’s proposal reflects its intention 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. 

Superior has received and expects to continue receiving the full support of the City of Beijing municipal government in completing the transaction. In addition, Superior is working to obtain all regulatory approvals from the Chinese central government for this foreign investment project. The transaction also 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. 

Hawker Beechcraft’s legal representative is Kirkland & Ellis LLP; its financial advisor is Perella Weinberg Partners LP; and its restructuring advisor is Alvarez & Marsal. Hawker Beechcraft entered into the exclusivity agreement in consultation with lenders holding a majority of the company’s pre-petition secured debt (Senior Secured Lenders). The Senior Secured Lenders’ legal representative is Wachtell Lipton Rosen & Katz and their financial advisor is Houlihan Lokey.