PHI files Chapter 11 plan for $630m debt-to-equity swap


PHI Sikorsky S-92

PHI Sikorsky S-92

Oil-and-gas helicopter operator PHI has filed a Chapter 11 plan that proposes a more than $630 million debt-for-equity swap in an effort to trim its liabilities.

“The plan represents a comprehensive financial restructuring of the debtors and provides much needed balance-sheet relief from an unsustainable debt load, with the goal of ensuring the debtors’ continued existence as a successful and profitable global helicopter transportation services provider,” PHI stated.

Filed with the United States Bankruptcy Court, Northern Texas District on 1 April, PHI proposes to swap roughly $630 million of the $700 million of the secured and unsecured claims in the case for stock in a reorganized PHI.

The oil-and-gas helicopter operator states it would then issue $70 million in new stock, as well as issue a new $150 million debt facility.

The debt PHI plans to swap for equity includes $500 million in unsecured notes, $130 million in secured notes provided by ThirtyTwo LLC, a financing affiliate of PHI’s chief executive officer Al Gonsoulin, general claims of the company’s unsecured creditors, who are not specified, and monies owed on 17 leased helicopters.

If the plan is accepted, the parties would be allowed to offload up to to $150 million of the new shares.

Furthermore, PHI proposes to issue an additional $70 million in equity in order to provide working capital as well as take out a new $150 million asset-backed credit facility.

PHI will hold 10% of the new stock as an incentive for the firm’s directors, officers and key employees.

The oil-and-gas helicopter operator filed for Chapter 11 on 14 March due to its not being able to meet its obligations on the maturing $500 million unsecured notes. Its $126 million purchase of competitor HNZ Group’s offshore businesses at the end of 2017  also created additional liquidity constraints, the operator stated.

PHI also cited the downturn in the oil-and gas industry, stating in the court filing that: “The downturn created an over-saturation of helicopters in the market, significantly impacting service companies’ utilization and yields. Indeed, this domino effect on the industry has required helicopter operators, like their customers, to initiate their own cost-cutting measures, including reducing fleet size and requesting rental reductions on leased aircraft. For some helicopter companies, like PHI, filing chapter 11 was impossible to avoid.”

PHI is represented by DLA Piper.

PHI’s Creditors

The Chapter 11 filing on 14 March showed that of non-insider creditors, Delaware Trust Company is owed the most due on the $500 million worth of 2019 note.

Helicopter Support Inc, GE Aircraft Engines and Cahill Gordon and Reindel LLP are owed amounts between $1.39 million to $1.8 million. All other debts are below $1 million.

List of PHI’s Creditors Who Have the 20 Largest Unsecured Claims and Are Not Insiders


  • Delaware Trust Company
  • Helicopter Support Inc.
  • GE Aircraft Engines
  • Cahill Gordon and Reindel LLP
  • Airbus Helicopters,
  • Aviall
  • Safran Helicopter Engines USA
  • World Fuel Services, Inc.
  • Bell Helicopter
  • Ramco Systems Corporation
  • Macro Oil Company, Inc.
  • Able Aerospace Services, Inc.
  • Precision Heliparts, Inc.
  • Agusta Westland
  • Regions Equipment Finance Corp.
  • Citizens Asset Finance, Inc.
  • BB&T Equipment Finance
  • Metro Aviation
  • Pratt & Whitney
  • Aviation Instrument Services, Inc.