PHI files for Chapter 11 as pressure from $500m note maturing hits
PHI has filed for Chapter 11 in the US Bankruptcy Court for the Northern District of Texas just as its $500 million worth of unsecured notes were due to mature.
The operator filing for Chapter 11 due to pressures surrounding its $500 million worth of notes has been anticipated for some time.
David Fowkes, managing director, Imperial Capital, told Helicopter Investor last month that the operator looked the most likely of the large oil and gas helicopter operators to file.
“When discussing the big North American operators with institutions investing in or contemplating investing in debt and equity securities, PHI seems to be considered the most likely to file for Chapter 11 simply because they are running out of time to secure the funds to repay their $500m notes maturing in mid-March or to reach an agreement with noteholders in time to file and complete any amendment granting relief,” Fowkes said at the time.
PHI says it remains in discussions with the holders of its $500 million in unsecured notes and their advisors to consider alternatives to address its outstanding debt obligations.
The operator adds it is also engaged in ongoing discussions with various lessors to address certain of its above-market lease obligations.
“Creditors and lessors will be supportive of PHI and its prospective business strategy and, to that end, anticipates filing a plan of reorganization in the early stages of the Chapter 11 process,” the operator stated in a press release announcing its Chapter 11 filing.
PHI says it is working to emerge from bankruptcy in the summer of 2019.
The operator says that existing cash on hand and a fresh tranche of $70 million in funding it received on 13 March under a new term loan with Blue Torch Capital means it expects to have sufficient liquidity to continue its business operations uninterrupted.
“After working closely with our advisors since the spring of 2018, interacting with our various stakeholders, and carefully evaluating all possible options, the Board concluded that pursuing Chapter 11 protection is the most appropriate course of action to address our matured debt and strengthen our balance sheet,” PHI commented.
“We are confident this will position the entire company for continued leadership in the industry and provide a platform for PHI’s long-term success. We remain fully committed to all of our stakeholders and to operating with the highest standards of safety and quality as we navigate this process, which we believe is the best option for a timely and efficient resolution to our financial situation,“ the operator adds.
Houlihan Lokey, FTI Consulting, DLA Piper, and Jones Walker are advising PHI.
PHI’s Chapter 11 follows other bankruptcy restructurings by operator CHC and helicopter lessor Waypoint Leasing.