May 6, 2016
CHC Group Ltd. filed for chapter 11 bankruptcy protection on Thursday, May 5, 2016, with plans to cut its debt and trim its fleet of helicopters. CHC said that this was due to the global slump in energy markets.
CHC has asked the U.S. Bankruptcy Court in Dallas, TX to allow them to eliminate a minimum of 90 aircraft from its fleet of 230 helicopters, with most of these being leased aircraft. This would be part of a broader package that would include restructuring about $2 billion dollars in debt.
The Canadian company said that it can “no longer bear the weight”, of its burdensome debt structure and expensive fleet amid declining oil prices and the resulting drop in demand for its services.
The filling allows the company “a much needed breathing spell”, as it continues restructuring talks with key creditors, Chief Restructuring Officer Robert A. Del Genio said in court papers.
The court papers show that besides the 90 aircraft CHC wants to unload, the company wants to get its fleet size down to 75 helicopters by 2017. CHC had $237 million in firm orders for new helicopters with an additional $245 million in options. It has been negotiating to defer orders or return leased aircraft early.
CHC is based in Richmond, B.C., Canada and has been struggling under successive private equity owners to restructure its debt that stood at $2.19 billion against assets of $2.17 billion as of January 31, 2016.
CHC went public two years ago, and has seen its market value wiped out in the wake of the global slump in energy production. The company was delisted from the New York Stock Exchange this past January.