Bristow Group Puts Bankruptcy on the Table
2:58 pm ET April 17, 2019 (Dow Jones) Print
By Becky Yerak
Aviation services business Bristow Group Inc. said bankruptcy is an option as it tries to restructure its debt in the face of dwindling liquidity.
The Houston-based company, which provides helicopter transportation services to oil and gas companies and has business units focused on search, rescue and aircraft-support services, said Monday that it has hired financial Houlihan Lokey Inc. and Alvarez & Marsal Holdings LLC and law firms Baker Botts LLP and Wachtell, Lipton, Rosen & Katz.
The professional firms, all prominent names in restructuring circles, will review strategic and refinancing alternatives that would allow Bristow to restructure its debt and other contractual obligations at a time when the company's level of cash and available credit is falling.
As of late last week, Bristow had $202.1 million in cash and liquidity available under its asset-based lending facility. That's down from $236.9 million at the end of the year and $319.5 million in the immediately preceding quarter, regulatory filings show.
"We have engaged financial and legal advisors to assist us in, among other things, analyzing various strategic financial alternatives to address our liquidity and capital structure, including strategic financial alternatives to restructure our indebtedness," Bristow said in a filing Monday with the Securities and Exchange Commission.
"We and certain of our subsidiaries may elect to implement such a transaction through chapter 11 of the U.S. Bankruptcy Code to obtain court approval of such transactions," it said.
Bristow has major operations in the North Sea, Nigeria and the Gulf of Mexico, and in most other major offshore oil-and-gas producing regions of the world, including Australia, Brazil, Canada, Russia and Trinidad. It said it also provides search-and-rescue services to the private sector worldwide and to the public sector in the U.K.
The decline in oil and gas prices has been a contributing factor in the bankruptcies in recent years of at least four other helicopter services companies, including PHI Inc.
Bristow said in its SEC filing earlier this week that its liquidity has been hurt by a prolonged downturn in the offshore oil and gas market, its debt levels, lease and aircraft purchase commitments and certain other commercial contracts. The company said it has substantial interest payment obligations related to its debt, as well as major lease and aircraft purchase commitments, over the next year.
A bankruptcy filing would protect Bristow from creditors and give the company a chance to revisit contracts.
Bristow also said Monday that it was taking advantage of a 30-day grace period and not making a $12.5 million interest payment due this week on 6.25% bonds maturing in 2022 as it continues to review its financing.
Those bonds were trading Wednesday at 17 cents on the dollar.
Bristow spokesman Adam Morgan told The Wall Street Journal Wednesday that the company was working with advisers to best position the business both financially and operationally.
Mr. Morgan said no final decisions have been made on how Bristow will reach that goal, adding that the company wouldn't speculate on the potential outcome of the work being done with advisers.
Bristow said in its regulatory filing that it also has obtained waivers from certain lenders that give it more time to file its financial report for the quarter ended Dec. 31. Bristow said internal controls over its financial reporting were ineffective as of March 31, 2018, and in subsequent reporting periods.
Write to Becky Yerak at
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WSJ Pro Bankruptcy also covers distressed companies. Inclusion of a company in this category is not intended to suggest that it will file for bankruptcy protection, default on its debt or suffer any other financial failure.
(END) Dow Jones Newswires
April 17, 2019 14:58 ET (18:58 GMT)