Bristow finalizes $385 million debt for equity swap
Bristow, the helicopter operator currently in Chapter 11 protection, has entered into a backstop commitment agreement with several of its noteholders for a $385 million debt to equity swap.
This is the latest step in Bristow’s recapitalisation plan to deleverage its balance sheet, a strategy which also saw the company amend and restate its restructuring support agreement this week. It also comes promptly after Bristow signed a new debtor-in-possession (DIP) commitment to provide a new debt facility of $150 million on 2 July.
Don Miller, president and CEO of Bristow, said: “This is another significant step forward as we continue on our path towards a timely emergence from Chapter 11. This $385 million commitment agreement, along with our new $150 million DIP financing, reconfirms the level of confidence shown by holders of the majority of our secured and unsecured notes, and the value they see in our global business.
“Our re-capitalization plan will significantly lower debt levels and improve liquidity. With the support of the parties to the agreements, we expect to emerge in the fourth quarter of this year as a stronger organization for all stakeholders including our employees and customers.”
As part of the debt-to-equity swap, the holders of $347.5 million of unsecured notes and those holding $37.5 million of secured notes will be paid cash for their notes, but are committed in terms of the backstop to subscribe for equity shares (common stock) in the company. Essentially, they will need to make good any shortfall when or if others subscribe for new shares in the equity rights offering. That lets Bristow off the hook of having to redeem the secured and unsecured debt when it matures and falls due for repayment.
The legalese is noted in italics at the foot of this article. Effectively, though, the note holders are under underpinning and guaranteeing the success of the rights issue.
Davis Polk & Wardwell LLP is serving as legal counsel and PJT Partners is serving as financial advisor to certain holders of the Secured Notes. Kirkland & Ellis LLP is serving as legal counsel and Ducera Partners LLC and Seabury Corporate Advisors LLC are serving as financial advisors to certain holders of the Unsecured Notes.
Bristow will also be drawing up a full reorganisation plan within “no later than five business days” from its latest filing on the 24 July.
Text as appears in the filing
Under the terms of the Rights Offering, (1) each holder of a claim on account of the Unsecured Notes or certain other general unsecured claims that is an accredited investor will receive Reorganized Equity and the right to participate in up to $347.5 million of the Rights Offering, and non-accredited investor holders will receive a specified cash payment, and the Unsecured Notes and such general unsecured claims will be cancelled and discharged; and (2) each holder of a claim on account of the Secured Notes will receive cash equal to 97% of such holder’s claims and the right to participate in up to $37.5 million of the Rights Offering. Under the BCA, the Commitment Parties have agreed to purchase any Rights Offering shares that are not duly subscribed for pursuant to the Rights Offering at the Per Equity Share Purchase Price (as defined in the BCA).
Click here for the complete filing.
