Hawker Beechcraft has filed for Chapter 11 with the US Bankruptcy Court for the Southern District of New York.

The company says it has reached agreement with financial institutions representing two thirds of senior secured lenders and senior bondholders on a financial restructuring plan, which will eliminate about $2.5 billion in debt and cut $125 million of annual interest.

Hawker Beechcraft has obtained a commitment for $400 million in Debtor-in-Possession (DIP) financing. This cash will be used to pay advisers, employees, suppliers, vendors whilst it is in Chapter 11.

Goldman Sachs Partners and Onex’s equity will be transferred to holders of the company’s secured debt, bond debt and certain other unsecured creditors.

Law firm Kirkland & Ellis is Hawker Beechcraft’s legal representertive with Perella Weinberg Partners financial adviser. Alvarez & Marsal is restructuring adviser.