Story ID: 132CHCAINNov16EditedByAY_NM
CHC Recapitalizes with $450 Million 
By: Mark Huber
Caption: The plan is part of a court-supervised reorganization process.
Word Count: 571
Bankrupt helicopter OGP services company CHC announced a financial restructuring plan on October 11 that will recapitalize the enterprise with $300 million in new capital and leasing lines of $150 million. GE Capital’s Milestone Aviation Group and its affiliates are taking the lead on the latter. CHC filed Chapter 11 bankruptcy in the Northern District of Texas on May 5 and subsequently announced plans to shed most of its leased helicopter fleet, reducing its overall fleet size to 75 from 230. At the time of its bankruptcy filing, the company listed debts of $2.19 billion against assets of $2.17 billion as of January 31. The refinancing is part of a “plan support agreement” (PSA) designed to speed CHC’s emergence from bankruptcy proceedings. It is subject to court approval. 

 “Executing this agreement enables us to establish a stronger capital structure for CHC and is another critical milestone toward completing our court-supervised reorganization process,” said Karl Fessenden, CHC CEO. “We look forward to obtaining approval of our restructuring plan, recapitalizing the company and putting CHC on the path to long-term success.”

The plan endeavors to repay CHC’s institutional debt holders but makes no provisions for its stockholders of record before the bankruptcy filing.

Among the provisions:

• Parties to the plan include the Milestone Aviation Group Ltd (“Milestone”) and certain of its affiliates (the “Milestone Parties”), holders (the “Plan Sponsors”) of approximately 67.56 percent of the outstanding principal amount of the company’s 9.25 percent Senior Secured Notes due 2020 (the “Secured Notes”), the Official Committee of Unsecured Creditors (the “UCC”) and holders (the “Individual Creditor Parties” and together with the Milestone Parties, the Plan Sponsors and the UCC, the “Consenting Creditor Parties”) of approximately 73.56 percent of the outstanding principal amount of the Company’s 9.375 percent Senior Notes due 2021 (the “Unsecured Notes”).

• Milestone will provide CHC with modified lease terms on its existing leases and additional helicopters at market lease rates. In addition to the leased aircraft, Milestone will provide a new $150 million asset-backed debt facility for purchase or refinancing of aircraft. Milestone has 215 helicopters worth $3.7 billion and supports 32 operators in 26 countries on six continents. The company has a forward order book of firm and option aircraft with an estimated aggregate purchase price of $3.2 billion.

Institutional creditors will have the opportunity to purchase new debt notes in the amount of $300 million and convert them into the majority of stock in the recapitalized company. Cash payments of up to $750,000 will be made to holders of certain unsecured claims. Holders of revolving credit agreement claims will be issued new term notes in the amount of their claim in accordance with the bankruptcy code, or such other treatment that is reasonably acceptable to the company, the UCC and the plan sponsors.

“CHC is one of the leading global providers of helicopter services and will be well positioned post restructuring to benefit from a recovery in the global energy industry,” said Mike Bevacqua, a managing director at Bain Capital Credit, which is the company’s lead plan sponsor and largest secured creditor. “We believe this recapitalization will have a positive outcome for all the company’s stakeholders, and look forward to continuing to play a constructive role in supporting CHC’s progress.”

“We remain confident that the restructuring we are undertaking will position CHC to capitalize on future growth opportunities as our industry recovers,” said CEO Fessenden.