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Thursday, October 13, 2016

CHC, Creditors Reach Pact for Ch. 11 Exit

CHC Group has reached an agreement with major creditors and a key lessor to emerge from bankruptcy with hundreds of millions of dollars in new capital and financing and asked a U.S. judge to approve the plan swiftly.

U.S. Bankruptcy Judge Barbara Houser has set a Nov. 2 hearing on the proposal, whose backers include The Milestone Aviation Group.

The major operator filed in May 5 for protection from creditors under Chapter 11 of U.S. bankruptcy laws, saying then that it hoped for a speedy reorganization of its operations and finances.

CHC told the court Oct. 11 that the “plan support agreement” reached with Milestone and key creditors would provide for such a reorganization and reflects sound business judgment and established bankruptcy precedents.

Under the pact, CHC would get $300 million in new capital from existing creditors and terms for restructured aircraft leases and additional asset-based financing commitments of $150 million from Milestone and its affiliates. CHC said it anticipates emerging from bankruptcy proceedings “as quickly as possible” with forecasted liquidity of more than $400 million and access to an additional $150 million of aircraft financing.

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

Key creditors include holders of more than 67% of the outstanding principal amount of CHC’s 9.25% senior secured notes due in 2020. These creditors are the investment firms Alliance Bernstein L.P., Bain Capital Credit, Carl Marks Management Company. Franklin Advisers, Inc., Tennenbaum Capital Partners and Wayzata Investment Partners LLC.

The plan would leave CHC “very 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 CHC’s largest secured creditor.