Key shareholder calls PHI’s silence “troubling”, PHI responds.
One of PHI’s largest shareholders Timothy Stabosz has penned an open letter to the helicopter operator asking it to address and rebut recent coverage of the operator’s financial standing.
The article published on Debtwire on 18 January claims that PHI’s existing equity would likely be wiped out after discussions with potential PHI executives. When Stabosz sought to contact PHI questioning these reports, the operator supposedly remained silent.
“I am left feeling completely heartsick at the stories emanating from Debtwire the last four weeks. It started on January 18th, and has only escalated…
“The fact that you have chosen not to respond, despite requests from a number of your largest shareholders urging you to do so, is completely unacceptable, and deeply troubling. Does this mean we are supposed to believe that the Debtwire stories are in fact true?”
He also cites the volatility in PHI stocks caused by the Debtwire reports as being: “suspiciously timed to meet the needs of short-sellers in order to generate a ‘supply of stock’ from them to cover their short positions.”
From July to August last year, PHI extended the deadline for acceptance of a tender offer four times, an offer to buy back outstanding $500 million notes from a 2014 issue so as to restructure its balance sheet. PHI considered a new $500 million issue maturing in 2023 but did not complete the offer – instead considering other alternatives to buy the notes back.
Stabosz closes his letter saying that there is at least one buyer for PHI who possesses the financial capability to refinance the company’s debt.
Stabosz previously wrote a co-authored letter with fellow PHI shareholder Christoper Olin from Alesia Asset Management to propose PHI sell its air medical business to help refinance its outstanding debt.
PHI released the following statement shortly after the letter was published, acknowledging the questions investors have regarding the tender extensions and assured they were pursuing a “wide range of options”:
“We understand our stakeholders may have questions about the status of the review of strategic alternatives that we announced last fall. Our officers and directors are collaborating with our advisors and others and continue to make steady progress as we evaluate a wide range of various options available to us.
“It is common for companies in a position like ours to explore several strategies before reaching final conclusions. We cannot provide advice on investments in PHI, nor would it be appropriate for us to speculate about the treatment of stakeholders in the various options we are continuing to consider. We do not intend to provide further comment on this matter until we have an appropriate update to share.”