Chinese buyer for PE-owned Beechcraft

The private equity-held jet-maker, Hawker Beechcraft, has agreed to be sold to Superior Aviation Beijing after filing for Chapter 11 bankruptcy in May.

Hawker Beechcraft has entered into an agreement to be sold to China-based aviation company Superior Aviation in a deal worth $1.79 billion, according to a company statement. Superior now has 45 days to do exclusive due diligence on the business.

Hawker is currently owned by the private equity arm of Goldman Sachs and Canadian private equity firm Onex, but filed for bankruptcy under Chapter 11 in May this year. According to reports, the firms acquired the business in 2007 for $3.3 billion in a highly-leveraged transaction.

Goldman and Onex could not be reached for comment.

If the Superior deal is unsuccessful, the Joint Plan of Reorganisation filed on 30 June 2012 with the US Bankruptcy Court will proceed, according to the statement. This would reportedly give control of the business to secured creditors and cancel out the private equity firms’ equity interests in the company.

Robert Miller, chief executive of Hawker Beechcraft, said in a statement: “With Superior’s previous experience operating a US business and its demonstrated ability to quickly restore a business to profitability after emerging from Chapter 11, we believe a transaction with Superior would maximise value for Hawker Beechcraft and its stakeholders.”

If the Superior-Hawker deal goes through, it would also give Hawker access to the Chinese market, Miller pointed out, adding that China's general aviation marketplace is “forecast to grow more than 10 percent a year for the next 10 to 15 years.”

The deal stands to be another example of China's growing cross-border activity. 

In May, China-based food conglomerate BrightFoods acquired a 60 percent stake of UK private equity firm Lion Capital-owned Weetabix in a $1.9 billion deal. Lion retained a 40 percent stake to capitalise on the access to China.