Reuters: Bankruptcy News: RLPC: Hawker details DIP loan

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RLPC: Hawker details DIP loan May 4th 2012, 12:56 By Billy Cheung NEW YORK | Fri May 4, 2012 8:56am EDT NEW YORK May 4 (Reuters) - After announcing its long-rumored Chapter 11 filing Thursday afternoon, Hawker Beechcraft Inc revealed additional details of its prepackaged bankruptcy plan in court documents posted late Thursday night. Subject to Bankruptcy Court approval, the $400 million debtor-in-possession (DIP) facility will be structured as delayed-draw loans. Proceeds will be used to support working capital, fund letters of credit and repay the $124.5 million senior tranche advance that the company borrowed at the end of March. The DIP facility is priced at 800bp over Libor with a 1.75 percent Libor floor. The loan will be issued at 97 cents on the dollar. Lenders also receive a 500bp participation fee. The company requires the DIP to fund working capital mostly due to the long production lead time and seasonality inherent in Hawker's business aircraft sales cycle. Hawker has historically built aircraft inventories for the first three quarters of the year to support deliveries in the fourth quarter when the company generates most of its annual cash flow. However, the typical jump in sales did not materialize in the fourth quarter of last year when cash flow from operations swung to a negative $42.8 million compared with a cash inflow of $245.1 million in 2010. Credit Suisse is acting as agent on the DIP. Hawker plans to seek adequate protection for its prepetition secured lenders. The company intends to continue to pay cash interest on its prepetition credit facilities at the non-default contract rate. The company has not disclosed plans on how it intends to deal with its defined benefit plans. The Pension Benefit Guarantee Corporation is listed as the largest unsecured creditor with a contingent claim. First day motions will be heard today at 3 p.m. Eastern Time in U.S. Bankruptcy Court for the Southern District of New York with Judge James Peck presiding. Link this Share this Digg this Email Reprints

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