Mahindra & Mahindra among others interested in Beechcraft Corp

23 Oct 2013

Mahindra & Mahindra (M&M), Brazilian aerospace conglomerate Embraer, and Cessna's  parent Textron Inc are among the companies that have shown interest in Beechcraft Corp, the US-based planemaker that emerged from bankruptcy protection early this year.

Beechcraft's management team is scheduling talks with potential bidders who had participated in the first round of bids, but it is not clear which of them have submitted offers, Bloomberg yesterday reported, citing sources.

Last July, Beechcraft reached a $1.79-billion deal to sell its business jet and general aviation operations to China's Superior Aviation Beijing Co Ltd, but the transaction collapsed amid fears that the US government would veto the deal.

Beechcraft exited bankruptcy protection in February and hired Credit Suisse to run an auction process, which analysts expect to fetch its owners around $1.5 billion.

Centerbridge Partners, Sankaty Advisors and Angelo Gordon & Co are among the private equity firms that own about 90 per cent of Beechcraft.

The report said that M&M had shown an interest even when Beechcraft was in bankruptcy last year, but Beechcraft's price expectations now that it has emerged from bankruptcy may deter the company from bidding.

Wichita, Kansas-based Beechcraft is a leading manufacturer of business, special mission, light attack and trainer aircraft for businesses, governments and individuals worldwide.

The company's major facilities are located in Wichita, with operations in Little Rock, Arkansas, Chester, UK, and Chihuahua, Mexico.

It has built over 54,000 aircrafts since 1932, of which more than 36,000 are flying today.

Beechcraft was formed through the 1994 merger between Raytheon's Beech Aircraft Corporation and Raytheon Corporate Jets units. Raytheon sold the company in 2006 to private equity firms Goldman Sachs Capital Partners and Onex Partners.

The leveraged buyout left the company with huge debt, and its troubles were compounded by the global recession of 2008, as customers shied away from buying its military planes and business jets.

After thousands of job cuts and defaulting on interest payments, Beechcraft filed for bankruptcy in May 2012 with debt of $2.14 billion.

A ortcoming projection rom Honeywell Aerospave estimates the market for business jets to rise to $18 billion during the current year. (See: Business jet sales expected at $18.4 billion this year).