Originally Posted by
Mitchaa
CHC still have cashflow, they still have major control of their business and it's running costs.
There are A LOT of idle aircraft around, if CHC have 100 or so that they want to get rid of, then how many do the other big players in the market have? The leasing companies of course won't want these aircraft back but under Chapter 11, they have no choice, CHC are protected and they will have to take their goods back.
With regards to buy back, the market is flooded with unused helicopters with supply far outstripping demand. Leasing companies have a couple of choices, receive the airframes back under chapter 11 and receive no payment or sell the airframe at a discounted market value price and get shot of it? If they go down the 1st path, they may have a helicopter sitting there depreciating for years until there is demand to re-lease it on. If they go down the 2nd path, they cut their losses, sign over ownership of the aircraft and get cash in the bank. CHC will have the upper hand here I would imagine?
Finance in future may be a little more difficult but CHC's balance sheet will improve significantly with upto 100 airframes going over the next few months.
I forgot to mention, CHC also plan to exchange $1bn worth of debt for equity in their company.
Never Fretter, I was a CHC employee many years ago, although I never quite managed to get myself into a suit and tie there. I just have a keen interest in a company I hold high regards for. These steps are positive in my eyes and from what I hear, the staff at the town hall meeting today were satisfied and somewhat relieved with the answers CHC management gave them.
Thanks Mitchaa. I see the logic. But....where will CHC get the $$$ to buyback a/c? Especially after filing ch11?? They can't leverage future contract work as their is none. Can't take hope for new contracts, to the bank!