In another blow to its prospects as a publicly traded company, last night Bristow Group was removed from the S&P SmallCap 600 by S&P Dow Jones Indices effective before the opening of trading on March 5. Bristow’s stock price dove on the news in after-hours trading, falling from $1.32 to $1. Companies are routinely removed from stock indices if a material change has occurred in its condition, if it has violated the guidelines established for publicly traded companied by the U.S. Securities and Exchange Commission (SEC), if it violates SEC rules, or if it is believed to have defrauded investors.
Bristow has yet to file its latest 10-Q report with the SEC for the financial quarter ended on Dec. 31, 2018, and is the subject of class-action litigation charging it with defrauding shareholders for allegedly materially misstating its financial condition and thereby artificially inflating the price of its stock.
In a statement issued February 19, Bristow said “material weaknesses” in its internal controls were related to the mismatch of a handful of engines to leased helicopter airframes, a situation that could place it in violation of certain lease covenants, cause it to reclassify certain long-term debt as short-term, and possibly force it to issue retroactive “going concern” warnings on financial statements. The company said it is taking corrective actions.