CHC Group plan of reorganization calls for $300 million in new capital

By Caroline Salls

Pittsburgh, Nov. 14 – CHC Group Ltd. filed a plan of reorganization and related disclosure statement on Nov. 11 with the U.S. Bankruptcy Court for the Northern District of Texas, according to a company news release.

Under the plan, CHC will complete a recapitalization that will provide $300 million in new capital from its existing creditors in the form of a rights offering for new 3½-year second-lien convertible notes, as well as terms for restructured aircraft leases and the option for additional asset-based financing commitments of $150 million from Milestone Aviation Group Ltd. and its affiliates.

On the plan effective date, $30.8 million in additional new second-lien convertibles will also be issued to the backstop parties.

On an as converted basis, the new notes represent 85.4% of the company’s new membership interests.

Under the rights offering, the $300 million investment will be allocated $280 million to the holders of senior secured notes claims and $20 million to the holders of unsecured notes claims.

Non-eligible offerees will be given the opportunity to receive a substitute distribution consisting of new membership interests, according to the disclosure statement.

A total of 79.5% of the new membership interests will be distributed to holders of senior secured notes claim, 8.9% to holders of unsecured notes claims and 11.6% to holders of general unsecured claims.

Also under the plan, holders of convenience claims will receive the lesser of payment in full in cash and a share of a claims distribution amount.

Holders of priority claims and other secured claims will be paid in full.

All existing CHC interests will either be cancelled or struck off.

The company said it intends to seek confirmation of the plan in early 2017 and is on track to emerge from the court-supervised process shortly thereafter.

The plan is supported by Milestone Aviation Group and some of its affiliates, holders of 67.56% of the outstanding principal amount of CHC’s 9¼% senior secured notes due 2020, the official committee of unsecured creditors appointed for CHC’s bankruptcy case and holders of 73.56% of the outstanding principal amount of the company’s 9 3/8% senior notes due 2021.

“We are continuing to make important progress as we enter the final phase of our financial restructuring,” CHC president and chief executive officer Karl Fessenden said in the release.

“We are confident that this plan, together with our strong and competitive operating model, will significantly enhance our financial flexibility and establish a sustainable capital structure that enables CHC to invest in and grow the business over the long-term.

“We look forward to emerging as a stronger company positioned for long-term success.”

The company will seek approval of the disclosure statement at a hearing scheduled for Dec. 20.

CHC is a Richmond, B.C., commercial helicopter operator. It filed for Chapter 11 on May 5, 2016 in the U.S. Bankruptcy Court for the Northern District of Texas under case number 16-31854.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.