CHC Group reorganization plan takes effect; company leaves bankruptcy

By Caroline Salls

Pittsburgh, March 24 – CHC Group Ltd. concluded its financial restructuring and emerged from Chapter 11 on Friday, according to a company news release.

The company’s plan of reorganization was confirmed on March 3 by the U.S. Bankruptcy Court for the Northern District of Texas.

CHC said it is emerging as a significantly stronger, better-capitalized company, and its competitive financial and operating structure will allow it to capitalize on its legacy and invest in and grow the business.

In conjunction with CHC’s emergence from its court-supervised financial restructuring process, the company received $300 million in new capital from its existing creditors.

The plan also sets the terms for restructured aircraft leases and the option for additional asset-based financing commitments of $150 million from the Milestone Aviation Group Ltd. and its affiliates.

As previously reported, $30.8 million in additional new second-lien convertibles will be issued to backstop parties.

Under a rights offering, the $300 million investment will be allocated with $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.

A total of 79.5% of the new membership interests will be distributed to holders of senior secured notes claims, 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 will be paid in full.

Holders of other secured claims will either be paid in full in cash or receive the collateral securing the claims.

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

“This process has allowed us to help secure CHC’s long-term health, and create a streamlined, highly competitive cost structure while establishing a fleet of aircraft better aligned with our customers' businesses,” president and chief executive officer Karl Fessenden said in the release.

CHC is a Richmond, B.C., commercial helicopter operator. It filed for Chapter 11 on May 5, 2016 under case number 16-31854.

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