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Updated: HBC Bankruptcy 'Imminent'

Pre-Arranged BK With Primary Lenders Suggested

ANN RealTime Update, 032912, 0023 ET: A 'prearranged' bankruptcy may be imminent for Hawker Beechcraft, Inc. Owned by Goldman Sachs's private equity arm and Canada's Onex, media reports have been disseminated over the last few hours suggesting that the aircraft builder is preparing to file for bankruptcy protection -- but is doing so in consultation with its major lenders.

Hawker changed hands in 2007, and was purchased for $3.3B. Currently negotiating with it primary lenders, HBC hopes to pull off a managed bankruptcy with the aid of Centerbridge Partners, Angelo Gordon and Capital Research & Management. ANN is monitoring the situation and will report details as they become available.

Original Report: Hawker Beechcraft said Tuesday it has reached an agreement with certain lenders that will provide the company with approximately $120 million of additional liquidity through an incremental term loan facility under its existing credit facility. The company intends to use the proceeds of this loan to fund its ongoing operations as Hawker Beechcraft continues working with its lenders toward a comprehensive recapitalization.

As part of the agreement, lenders currently holding approximately 70 percent of Hawker Beechcraft bank debt have agreed to defer the company’s obligation to make certain interest payments on the company’s senior secured revolving and term loans when due, and have granted the company relief from certain existing loan covenants. This forbearance agreement is scheduled to expire on June 29, 2012.

Robert S. (Steve) Miller, CEO of Hawker Beechcraft, Inc., said, “Like others in the industry, Hawker Beechcraft has been impacted by the prolonged weakness in our markets. In the last three years the company has made aggressive transformational changes in all operational functions. While these steps have been effective, the company is operating with a debt load that is restricting its ability to succeed and fully execute on its strategy. We believe this agreement will stabilize the company’s current financial position and ensure Hawker Beechcraft continues manufacturing the best airplanes for our customers and providing first-class service and support. At the same time, the agreement provides Hawker Beechcraft and its lenders with additional time and flexibility to work together to recapitalize the company and better position Hawker Beechcraft for the future. We believe this loan demonstrates confidence in the long-term value of the company.”

FMI: www.hawkerbeechcraft.com

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