CHC Group said it has entered into a plan support agreement (PSA) with $450million committed to recapitilisation of the firm.
The move has been made in respect of its Chapter 11 plan of reorganisation.
The company said the agreement will provide $300 million in new capital from its existing creditors, as well as terms for restructured aircraft leases and additional asset based financing commitments of $150 million from its largest lessor and its affiliates.
It will be implemented pursuant to a plan of reorganization as part of CHC’s Chapter 11 proceedings that were commenced in May this year.
In a statement the helicopter operator said it expects to submit the plan to court in the next few weeks and anticipates emerging from the court-supervised process as quickly as possible with forecasted liquidity of more than $400 million and access to an additional $150 million of aircraft financing.
Chief executive Karl Fessenden said: “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.
“With the support of the Plan Sponsors, Unsecured Creditors Committee, and The Milestone Aviation Group Limited as our lead aircraft lessor, we look forward to obtaining approval of our restructuring plan, recapitalizing the company, and putting CHC on the path to long-term success.
“We remain confident that the restructuring we are undertaking will position CHC to capitalise on future growth opportunities as our industry recovers.”
The parties to the PSA include the Milestone Aviation Group Limited of approximately 67.56% of the outstanding principal amount of the Company’s 9.25% Senior Secured Notes due 2020, the Official Committee of Unsecured Creditors, and holders of approximately 73.56% of the outstanding principal amount of the Company’s 9.375% Senior Notes due 2021.
Mike Bevacqua, a managing director at Bain Capital Credit, which is the company’s lead Plan Sponsor and largest secured creditor, said: “CHC is one of the leading global providers of helicopter services, and will be very well-positioned post restructuring to benefit from a recovery in the global energy industry.
“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.”
Under the lease restructuring term sheet entered into between the company and Milestone, which is incorporated into the PSA, Milestone will serve as the lead lessor for CHC’s go-forward fleet of helicopters.
Milestone will also provide CHC with modified lease terms on their existing leases and additional helicopters at market lease rates.
In addition to the leased aircraft, the Milestone Term Sheet includes provision of a commitment letter for a new $150 million asset backed debt facility for purchase or refinancing of aircraft.
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