CHC troubles mount as it misses $46 million bond payment on debt
a non-US company often can file chapter 11 so long as it has “nexus” to the US
CHC the provider of helicopters to offshore oil and gas platforms, ivilian search and rescue and air medical evacuation has missed a $46-million bond payment on debt that matures in 2020.
The company has a 30-day grace period after the payment due date to make the interest payment and avoid defaulting on the bonds, according to terms of the debt contract. Of January 31, the aggregate principal on those bonds was just over $1 billion.
The company stated that:
“It is in the best interests of CHC and all of its stakeholders to use the grace period to continue working with its advisors to review all strategic alternatives for restructuring the Company’s debt and improve CHC’s long-term capital structure”.
Failure to make the payment by the end of the grace period then brings a new situation. Either the trustee or the holders of at least 25% of the 2020 bonds could chose to have their money back prior to the due date.
The default itself could result in a cross-default under other agreements, even without the grace period. At the last full-year accounts to 30 April this year, the total assets of the company were $2,252 million, and with a figure for liabilities of $2,070 million,it had a net balance of $182 million. This was after the company had increased funds through the issue of $589 million of convertible preference shares during that financial year.
In March 2016, CHC issued their unaudited third quarter numbers to 31 January 2016, showing assets down slightly to $2,170 million, liabilities up to $2,190 million and thus the net figure was nearly $200 million worse in nine months and $20 million in deficit. A further $40 million of convertible preference shares had been issued in that period.
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