Chc Sold!!!

[grover76]

CHC Helicopter sold for $3.7-billion

TAVIA GRANT
Globe and Mail Update
February 22, 2008 at 10:25 AM EST

CHC Helicopter Corp. was sold Friday to Greenwich, Connecticut-based First Reserve Corp. for $3.7-billion in what the companies said is the largest ever buyout in the oil-field services industry.

Vancouver-based CHC is the world's largest provider of rescue helicopters, along with services to the global offshore oil and gas industry, while First Reserve is a private-equity firm.

The all-cash sale “builds upon CHC's position as a world-class helicopter company,” said CHC chairman Mark Dobbin in a release.

An affiliate of one of First Reserve's funds will pay $32.68 a share, a 49-per-cent premium over Thursday's closing share price. CHC's headquarters will stay in Vancouver, and the shares will be de-listed from the Toronto Stock Exchange.

CHC's unanimously approved the deal and recommends shareholders vote in favour of the transaction.
Merrill Lynch Canada and Scotia Capital advised CHC.

[Chopper Jog]

Dear Colleagues,

As you are now aware, CHC’s shareholders have been presented with an offer from First Reserve Corporation to purchase all the outstanding shares of the company. CHC’s Board of Directors has examined the proposal and have unanimously recommended that shareholders accept the offer. It is expected, but not assured that the majority of shareholders will vote to accept the offer, resulting in CHC being acquired by First Reserve Corporation.

This is very exciting news for CHC. First Reserve is a well established energy-focused private equity firm, which will bring many strategic benefits to CHC. Headquartered in Connecticut, First Reserve has been involved in the oil and gas industry for more than 25 years and has extensive experience in the energy sector. Included in First Reserve’s portfolio are prominent companies such as Weatherford, Abbot, Cal Dive and Beryl Resources. First Reserve’s mission is to nurture and grow businesses, and they are excited about CHC’s growth strategy in support of the oil and gas industry, and Heli-One’s MRO business.

First Reserve views CHC as a great investment. The company is not simply buying CHC’s outstanding shares, but is buying CHC’s strategy and plan for the future. First Reserve is interested in partnering with the existing management team and employees to continue their successful record of growing and expanding the business. First Reserve believes CHC has tremendous potential and is ideally positioned to capture the phenomenal growth in both the oil and gas and MRO industries.

As part of First Reserve’s portfolio, CHC will benefit from their experience and contacts throughout the industry. First Reserve will provide CHC with new opportunities to expand and improve the services we provide. They will also assist the current management team to improve CHC’s systems and processes, and introduce best practices developed across First Reserve’s portfolio of companies.

CHC has prospered under the leadership of the late Craig L. Dobbin, whose vision and entrepreneurial spirit has made CHC what it is today. I look forward to partnering with the team at First Reserve to build on such a great legacy and continue to grow. I am energized and excited about this new chapter in CHC’s evolution.

Please refer to the attached Q & A for more information, and direct any additional questions to your divisional President or designate. This is a great opportunity for CHC, lets all work hard to ensure our great company’s continued success.

Sincerely,

Sylvain Allard
President and Chief Executive Officer

[rumline]

Uh...oh....who smelt this one coming....

Curious to see who's made the 49% overnight profit in share value.....:E!

Also...the tax experts at CHC won't say how this will affect the long coveted OETC advantage....now that we're owned by a company based in the Excited States of America.....:sad:

Notice how the communictions are all coming from current management ....and not from First National (who ever the f**k they are....)

Looks like that famous open door policy is quickly and firmly closing.


Watch that last step.....it's a doozy..

[Chopper Jog]

Rumline and CHC Employees,

"Curious to see who's made the 49% overnight profit in share value.....!:E"

Just have a look in the CHC carpark....perhaps a few early retirements in YVR!

Rule # 1 Keep the investors happy......Rule #2 don't consult with the employees!

GO.CHC.CA....GHPA!:}

GO.CHC.CA....GHPA!:8

GO.CHC.CA....GHPA!:ok:

Note: Perhaps there is a bright side to this......Will the First Reserve Corporation accept the GHPA or the court's ruling to represent the pilots?

[rumline]

Well we're all a little gob-smacked around here.....just who are these faceless Hugo Boss suit wearing bean counters in Connitticut anways and why would they be interested in helicopter company...I'm betting that this is just a precursor to our sale to O-Log
....I'll buy it from you....and sell it to them and we'll all make a squillion...

With regard to the taxes....the CRCA clearly states in it's tax ruling that the OETC applies to CANADIAN owned companies or WHOLLY own subsideries of a Canadian company involved in oil, gas or engineering ....plus the provision for UN work as well....but the key here is CANADIAN owned....as clearly we shall NOT be.....

The speculation fires are burning brightly and the herd is spooked.....:bored:

Interesting how fast Mark got rid of us....just as the Canadian labour board ruled that the GHPA CAN represent CHC pilots no matter where they work or what company we've partnered with....

Look for copies of the DuPont Registry lying around management's offices......champagne dreams and caviar wishes:}

[Night Watchman]

CHC Helicopter sold for $3.7-billion

Damm, bloody Ebay... I was outbid at the last minute! :(

[rumline]

From the First Reserve website :

The company's current portfolio includes stakes in some 20 firms, including Brand Energy & Infrastructure Services and Dresser. First Reserve's investor base is primarily comprised of corporations, endowments, foundations, and public retirement funds.

Hmmmmm a google search did not reveal any hint as to who these 'investors' are......I'm wondering if we're now owned, defacto,....by oil companies:oh:

Small wonder then, that CHC has rapidly divested itself of all non-energy related contracts....

[Canuck Guy]

So will employees now be getting paid in that ever-plummeting American dollar? :=

[before landing check list]

Will the pilots loose their tax break now that it is not Canadian owned? And if that happens will tthier pilots make a mad dash away?

[rileyemi]

Ah, but the question that needs to be asked is now that CHC is an American company will the American pilots be receiving the dreaded W2? Food for thought. PS, for you Candaian pilots its the equivalent to your T4.

[SASless]

One of the Golden Rules of Helicopter Aviation is when on a good lick...enjoy it because it shall not last!

[Outwest]

Non-Canadian pilots have nothing to worry about, the company will still be operated from Canada, employees will still be paid in Canadian dollars.
The Canadian pilots however may be in a different boat. I understand that the wording in the tax law regarding the OETC (Overseas employment tax credit) says " A Canadian resident company doing business overseas" not "Canadian owned"
So we should be OK on that front, but lets wait and see what the official word is.

The one thing I don't understand is the Canadian OC situation. When I worked for a Canadian company that was taken over by an American company, we lost our OC. The reason being that to hold an OC in Canada (and Europe I believe) is that the majority share holders must be Canadian (or EU as the case may be).

That is the reason why so many years ago Craig Dobbin went back thru his family tree to get his Irish citizenship to be able to buy BIH.

[NorthSeaTiger]

So what does this mean for job security ? How will it affect say chc global , European ops , SAR ?

[Super 61]

I don't think anyone has anything to worry about there, word here is that this will lead to more investment and a better growth strategy. Maybe our new masters will finally be able to get everyone to play nicely together in the CHC sandbox. ;)

[smickey]

Here's some additional info on OETC. Para 14a would suggest that Cdn employees will still qualify for OETC, assuming CHC's headquarters stays in Canada. But nothing is ever cut and dry when it comes to interpreting tax regulations, so who knows what the ruling will be.....

Revenue Canada Website states:

13. A specified employer, for OETC purposes, is described in subsection 122.3(2) as:
(a) a person resident in Canada (see ¶ 14);
(b) a partnership in which persons resident in Canada or corporations controlled by persons resident in Canada own more than 10% of the aggregate fair market value of all interests in the partnership; or
(c) a corporation that is a foreign affiliate (as defined in subsection 95(1)) of a person resident in Canada.

See ¶ 16 regarding certain services an individual performs for which no OETC may be claimed on the employment income received.
¶ 14. Subject to subsection 250(5), a specified employer that is a corporation is generally considered to be a resident of Canada if:
(a) its central management and control are located in Canada; or
(b) it falls within the criteria set out in subsection 250(4) which deems a corporation to be resident in Canada throughout a taxation year.

For further information on the residency of a corporation, see the current version of IT-391, Status of Corporations.

IT 391 states:

Corporate Residence
15. The common law has generally established that a corporation is resident in the country in which its central management and control is exercised (DeBeers Consolidated Mines Limited v. Howe, (1906) A.C. 455). Usually management and control exists where the members of the Board of Directors meet and hold their meetings. However, if the Board of Directors of a company does not in fact exercise its powers, and the management and control of the company is actually exercised by some other party, such as the directors of its parent company or its principal shareholder, who are resident in another country, the company will be resident in that other country (Unit Construction Co. Limited v. Bullock, (1960) A.C. 351).

[SASless]

Perhaps the decline in share price for CHC over the past year or so might account for the decision to sell out....Bristow Group seems to be a lot better in that regard than does CHC.

[ATPMBA]

I predict CHC will head down hill from here. It seemed to me that Craig Dobbins was the driving force and soul of the company. I am sure the new investment company is all giddy that oil is at $100 a barrel, let's see how giddy they are when oil hits $40 or $25 a barrel.

Many of these pencil pusher investment types have no idea of crew duty and flight time limitations or required training. They think just because they sign the front of a paycheck they own a pilot's soul 24X7.


I wonder if Sylvan has a non-compete agreement.

I also believe this sale paves the way for another operator to come to the North Sea.

One more thought, how will the American company comply with the UK 49% foreign ownership rule?

[Plakstift]

Um... lifting...

Clegg's memo is indeed reassuring but that is the problem. This man job's is to say anything to keep the show going on.

Until Revenue Canada says so it is not a done deal.

Just ask to the poor bastards who took the early U.N. jobs a while back and were told that the "OETC" was a sure thing only to be handed a 30k tax bill at years end. CHC's answer to that goof was... "it sucks to be you"

Smickey is right. It never cut and dry with the CRAhttp://www.pprune.org/forums/images/icons/46.gif.

[SASless]

Um,

As in any decision to buy stock in a particular company, the book value of the company plays a role in the purchase decision.

As long as the book value is such that a complete liquidation of company assets and auctioning off of proprietary property such as customer lists, contracts, and the like, exceeds the purchase price, one should be on firm ground.

Any thoughts of what CHC owns (contracts, customer lists, patents, STC's, etc) that would play a significant part in the buyer's decision to buy CHC? (Assuming they might be intent upon selling off parts of the company)

How would you split up the operating units to maximize the value of their purchase?

[Phone Wind]

Here's a comment I found by an American poster on a Nigerian website which offers a bit more insight into First reserve:

"Give First Reserve a mimimum of 2 years before they dice it up and sell it off. Everytime they buy a company, they make their money quickly and then put it up for sale for another tidy sum. I watched what they did to Powerchokes when they wanted to go public in which they were able to buy the Halliburton Well Testing division and became Powerwell and then when things were going great, they sold them off to Expro for a nice profit. After all that was said and done, things within the ranks in the new group got ugly. Of course, it you want to look at it another way, they helped Weatherford become what they are today"

[LeakyLucy]

What you guys worried for ? They chop it up and spit it out ? Consider it splitting the atom....all you clever people out there will be still be involved and I've no doubt you'll make those smaller and more compact spin offs a continued success !:ok: Remember companies grow, diverge and split all the time - that's money making !

[LeakyLucy]

All I'm trying to say is many of you guys are sitting in the sun room with the blinds down ! Sh*t happens and you deal with it ! It aint always gonna turn out too bad !:cool:

[5711N0205W]

let's see how giddy they are when oil hits $40 or $25 a barrel.


An unlikely scenario I suspect.

[twisted wrench]

I was at Okanagan when it was bought by Sealand and CHC was formed. Many people thought the company was just going to go downhill.
Well 22 years later and many changes all it did was go uphill to a better company.

[Outwest]

TW,

:= Sealand did not buy OKY.......Sealand was bankrupt at the time.

CHC,actually Canadian Helicopter Corp, bought Sealand, Oky, Ranger, Maple Leaf, Toronto Helicopters, etc, etc.....

CD formed CHC and went to Toronto and convinced some Bay St. suits that if they loaned him the cash, he could build a successful helicopter company.

They bought into it and as they say, the rest is history.

[carholme]

Outwest;

Sorry, but Sealand did purchase Okanagan and beat out the Bristow (United Helicopters) bid. I can state this as my job at Sealand at the time involved direct talks with Emile Lupien on the maintenance changeover.

Regards

carholme

[Outwest]

I have no doubt that Sealand people were involved with the take-over of OKY, but I also was there at the time, and CHC, not Sealand, took over OKY officially on Jan.01, 1988.

CHC bought/acquired both companies (and many others).

[carholme]

Outwest;

As you wish.

carholme

[Outwest]

It is not as I wish, if you don't believe me, maybe you will accept it if you read it from the Offical CHC website...
http://www.chc.ca/about_chc_history.php


The CHC name was created as a “Canadian Holding Company” by St. John's businessman Craig Dobbin in 1987 when he headed a group that purchased Okanagan Helicopters and Toronto Helicopters, and merged them with his own company Sealand Helicopters

[carholme]

Outwest;

I am not here to argue with you. In 1985 Sealand was working with Okanagan in the final stages, leading up to the formation of CHC, the original holding company which was formed to create the buyout. Only then was everything put under the new umbrella.

carholme

[Squeaks]

Outwest;

I am not here to argue with you.

Really?


:=

[HVHmt]

Outwest,
I don't know anything about Sealand ever being bankrupt, nor did I read of it in CHC website (which you had supplied)!
WTF!!!:confused:

[Impress to inflate]

Now an American company owns CHC does that mean that all it's staff will be called Chuck, Scooter or Betty Loo ??

[Outwest]

Carholme,
my apologies, I have included the CHC webmaster link so you can correct the mis-information they have. :ugh:

[email protected]

HVHmt,
I stand corrected, both Sealand and EPA were viable and profitable operations ;)

Seems even after 20 years, the old pride still runs deep......

[albatross]

"Now an American company owns CHC does that mean that all it's staff will be called Chuck, Scooter or Betty Loo ??"

Well of course we will thar "Impress to inflate":hmm:

We're working it out.

I am legaly changing my name to "Billy Joe Heli Bob."

My co-pilot is changing his to "Beauregard Lee Cornepone."

Our technical writing team is a hard at work changing checklists to use "YUP" and "NOPE"

TRE's will be called "Check Airmen."

No more Moose Burgers - No siree - It's Gumbo and Philly Cheese Steaks for us from hereon in.

We no longer "request clearance" - "We're looking to depart!"

We don't "replace defective equipment" we "change it out."

"Moosehead Beer?" not when we can have another "Bud lite." :yuk:

"'Chez Pare' strippers?" no more - politically correct "Hooters" for us.:{

We are all getting T shirts that say "CHC Love it or Leave it" and "My Checklist Right or Wrong.":E

"Hummingbird" OUT "Eagle" IN

We will let you know how that all works out for us.

We, however, haven't yet started calling "Engineers" "Maintainers" and ain't going to neither - some things are sacred!:ok:

[Helipolarbear]

Inflow effect or transverse flow..................:}
I guess it may be called AHC from now on!:cool:

[SASless]

Now when will CHC buy BRS? Would that not make for one heck of an economy of scale? It would sure put a kabosh on the to and fro'ing in Nigeria.

[Impress to inflate]

Nice one Albaross, sorry....... Billy Joe Heli Bob

[heliminger]

I hope the buy out works for the company and workforce. I was working for Bristow when they were taken over by a company called Bricom. The net result was the pension fund being reduced to minimum, a number of top end and bottom end staff redundancies and a fairly unpleasant shuffle towards onward sale. It took several years, a couple of other shady owners before the takeover by another HELICOPTER company OLOG to make the recovery.
It must be emphasised that nothing Bricom did was illegal but there was a pretty awful stench of excrement about it. It didn't matter to Bricom that Bristow was a helicopter operator it could have made rubber dog doo for all they cared, it was just a cynical soulless money making excercise.
I don't work for CHC but, I do not wish any other group of pilots and engineers to go through the humilliation of having some faceless money man go through your pockets and knicking the lot.

[Hoppit]

http://www.chc.ca/press_releases_details.php?url_src=http%3A%2F%2Fcnrp.ccnmatt hews.com%2Fclient%2Fchc%2Frelease_xml.jsp%3FactionFor%3D9005 93

So CHC is now owned by an 'affiliate of a fund managed by First Reserve', but what happens to crew's training bonds, contracts etc??

Presumably the new company now own all the assets including the staff, aircraft etc, so do training bonds with CHC effectively finish or get transferred to the new company or does nothing change??

Perhaps those more legal than I can share an opinon??

[902Jon]

I think you will find that everything will be transfered - no chance of getting out of your training bond I'm afraid. It is the same as if your bank has gone belly up or has merged with another. Unfortunately your mortgage or your overdraft will not disappear overnight. :)

Does anybody know whether this announcement will mean an end to the spending freeze that has affected recruiting/training?

[helimutt]

902jon, I have no idea where you get your info from but there has been no spending freeze on recruitment or training. Not from where i'm sitting anyway. :eek:
There is a shortage of suitable applicants for the positions available, that doesn't mean recruitment isn't happening. Also, just because the recruitment boom of the last couple of years has slowed now, that also doesn't mean that it isn't taking place.:hmm:

Training continues, with probably millions being spent on sim training, new sim building in ABZ etc etc.

Hope that helps.

[Hoppit]

Not sure how mortgages and overdrafts compare to be honest, but the only way that I can view it is that the bond was signed by the employee and CHC, not First Reserve.

If you choose to join the largest helicopter company in the world, believing that you are getting job security, a long term career etc etc, then how do you stand with the uncertain future now of possibly getting broken up and sold up in parts?? After all, First Reserve can do anything they want to the various business units of CHC.

Surely that training bond is now null and void as you should have the right to move on if you are unhappy with the situation, without incurring the penalty of the original contract that you signed with CHC, who effectively no longer own you. :bored:

[steve_oc]

I should just point out that regardless of "owner" the legal entity is still CHC Scotia (in UK) so contracts are with that legal entity.

[Outwest]

Hoppit,
You still work for CHC, your pay cheques will still say CHC, the a/c will still say CHC on the side.

It is irrelevant who owns CHC.

[GKaplan]

If you choose to join the largest helicopter company in the world, believing that you are getting job security, a long term career etc etc, then how do you stand with the uncertain future now of possibly getting broken up and sold up in parts?? After all, First Reserve can do anything they want to the various business units of CHC.

This has always been true... whoever owns the company.
;)

[SASless]

"Bond" as used in the discussion extant denotes "contract"....the contract goes with the sale young lad....the wording of the contract is the authority.

As said in the US Army years ago.....YSTFC! Live up to it....or take yer chances if you viollate it.

Now of course....depending upon where you signed it and which court holds jurisdiction might determine the feasibility of the "Company" pursuing the matter in court if you live outside that jurisdiction.

The bad news on this is when the violates a contract or agreement regarding your employment.



An example of how the game is played....perhaps it is different for CHC.


Bristow (Redhill, UK) advertises for pilots for Nigeria

Bristow(Redhill, UK) does the interview, provides accomodation, meals, and an air ticket to the interview.

Redhill provides onward transportation to Nigeria.

You sign a contract showing you are employed by Bristow but seconded to BIAGLE (a Jersey, Channel Islands firm) to work for Bristow Nigeria.

Bristow Redhill does the payroll accounting and pays your monthly sums.

The contract is bound by Jersey, Channel Islands law.

Question: As a Canadian, American, or Brazilian....and a conflict occurs regarding the contract.....just how much chance do you think you have to win in a dispute in court if you could find a court that woiuld entertain the action?

[scottishterrier]

Many many thanks for the clarification of what a bond is. That has cleared it up for us all.

You did not however define a "big bond".

Do you work for the previously mentioned operation ?

[GKaplan]

First Reserve may be american but the European operations of CHC are now dutch !! :)

European law requires that each holder of an aviation license issued by a member state of the European Union or the European Economic Area be both majority owned and effectively controlled by member states of the EU or EEA or by nationals of such member states. Up until the acquisition by First Reserve Corporation, CHC accomplished this requirement through the Irish citizenship of the Dobbin family. Following the acquisition, Mr. xxxxx, a Dutch national has invested a 50.1% participation in CHC’s European operating entities through a Dutch Holding company named EEA Helicopter Operations BV (“EEA”) which will be the parent company of CHC Scotia Limited, CHC Ireland Limited, CHC Helikopter Service AS, CHC Denmark As and CHC Helicopters Netherlands BV.

[...]

This structural change will not impact your terms and conditions of employment, which will remain with the legal entity in which you are employed today, nor your day-to-day activities carried out to support our valued customers. The management structure of CHC Scotia Limited, CHC Ireland Limited, CHC Helikopter Service AS, CHC Denmark As and CHC Helicopters Netherlands BV remains the same and the company will continue to fly under the CHC logo working together with CHC to grow our operations. As of the close of the transaction, CHC will continue to supply the vast majority of our helicopters, and Heli-One will provide service on those helicopters.

[Hoppit]

...so contracts are with that legal entity

So how is the legal entity defined? The name on the AOC, company registration number or...??


....the contract goes with the sale....

So are you suggesting that its transferred?

What if another operator had bought CHC then? How would that be different?? Or is it only different if CHC is closed down in terms of company registration and AOC?

I appreciate the input guys/ gals.

[GKaplan]

So how is the legal entity defined? The name on the AOC, company registration number or...??

My guess is it follows the legal registration of each business.

In Europe, the legal entities forming parts of CHC are:
- CHC Scotia Ltd
- CHC Ireland Limited
- CHC Helikopter Service AS
- CHC Denmark As
- CHC Helicopters Netherlands BV

Nothing is transferred : if you signed a contract with Scotia (for instance), Scotia is still what it was and so is your contract.
The main point here is that the change of ownership affects things on a different level than your specific relationship with the company.

What if another operator had bought CHC then? How would that be different?? Or is it only different if CHC is closed down in terms of company registration and AOC?

I think you're right, it wouldn't have been any different unless there was a change in the legal terms of the registration (and even so I'm not sure you would so easily be relieved from obligations previously contracted...)

[Shell Management]

GKaplan is correct.

And so is SASless - if you sign a contract with BIAGL you have a contract with BIAGL. By the way, SAS, if you want to sue, its best to get right offshore island (remember - the G is a clue) - the legal beagles are a bit picky about that sort of detail!

Funnily enough another CHC vehicle, EEA Helicopter Operations Limited, was formed in Dublin in Jan 2006, so perhaps an earlier EU national shareholder pulled out when this whole de-Dobbification process started years ago.

The EEA arrangement is not that different to Bristow Helicopter's means of being European.

The only difference is Caladonian Investments, who 'sold' Bristow to OLOG on 1998, actually do still own a big chunk of Bristow in the UK, a more than modest chunk of Bristow in the US and have 2 seats on the board. But that little subtly seems to have missed the 206jocks still sobbing into their frozen daquaris as the 'better' (ha-ha) helicopter company now becomes the new Bristow Offshore Helicopters Inc at long last.

Another possibility though is that FR maybe start to back European thinking (i.e. Norweigian) now over the Canadian thinking in the same way that trend has happened in Bristow.

[loav8r]

There was a comment made earlier asking about recruitment freezes. I would like more comments on this topic if possible. I was to fly to Vancouver this past summer and conduct part two of the interview for an S-76 IFR PIC job overseas; however, one week prior to interview it was suspended until further notice. After speaking with the new H/R person in Vancouver (recently) I was told the hiring "should" begin again at the first of the new year. I am crossing my fingers but with a little anxiety. I truly want the opportunity to fly with CHC but am a little concerned about the reality in when the recruitment will start again. Can anyone add to this? Do you guys at CHC see the hiring to begin again in the "near" future?

Thanks in advance.

[the delaminator]

It seems to be related to the problems in Nigeria. Once they get that sorted out and assuming it doesn't end up with CHC/ANC leaving Nigeria completely then the hiring will commence.

Also assuming of course that the world economy doesn't slide right into the loo in the meantime.

[loav8r]

What exactly is the problem with CHC in Nigeria? Is this the only area where CHC is stumbling or are there problems elsewhere? Whatever the problems are, I hope they are resolved soon so I can get back to the hiring process.

[SASless]

Shells,

I was a realist....suing BIAGLE would be a waste of effort and money. Suing BHL in the UK is a lead pipe cinch based upon past actions as I recall.

Did the company ever win in an action brought against it by an employee?

[rwm]

for more info about CHC woes check out the thread in Africa Aviation forum.

http://www.pprune.org/african-aviation/303257-chc-africa-closing-down.html