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What's happening in CHC?

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What's happening in CHC?

Old 31st Jan 2016, 21:14
  #321 (permalink)  
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With Gabon/Turkey you mean the 2x 332 for the Shell Noble Globetrotter 2?
I thought the Shell - CHC contract was according the same lines as the Shell - Noble contract 5 years + 5 1 year options starting 2013?
Now i know that Shell has a habbit of changing helicopter provider but the Noble contract seemed pretty solid.
Noble took over Frontier for their 3 rig contracts with Shell and at same time closed the long term deal for the two Globetrotter newbuilds.
Recently 1 of the 5 contracts has been cancelled (the artic rig Discoverer) but Shell paid 90% of the remaining contract price..
So i guess and hope that CHC can keep this contract or at least another helicopter provider can bring in their crews.

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Old 1st Feb 2016, 08:08
  #322 (permalink)  
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Now i know that Shell has a habbit of changing helicopter provider but the Noble contract seemed pretty solid
SLB, Shell cancelled the Noble contract so the CHC contract went with it - not a change of operator.
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Old 1st Feb 2016, 10:39
  #323 (permalink)  
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Has Shell terminated CHC in Australia until the Prelude FLNG arrives?

I thought there was a FULL SAR EC225 with medical crews etc in Australia provided for community use by Shell? It must be expensive if Shell still has it.
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Old 1st Feb 2016, 21:34
  #324 (permalink)  
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The end at NYSE: News - CHC Helicopter
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Old 1st Feb 2016, 22:33
  #325 (permalink)  
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Thumbs down Is The Fat Lady Starting to Sing?

That press release has an old POS S-76A on it, not even the current paint colours.

Is this the beginning of the end?

'Congratulations' to all who engineered this outcome.
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Old 1st Feb 2016, 22:41
  #326 (permalink)  
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Well Bill and his mates all did well out of it. Everyone else? They were pretty much screwed over.
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Old 2nd Feb 2016, 06:19
  #327 (permalink)  
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New Apple product?
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Old 2nd Feb 2016, 07:52
  #328 (permalink)  
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I stand corrected. Below $50 million over 30 days is the non compliance figure which CAN get you delisted. Below $15 million over 30 days triggers an immediate delisting.

Humble pie
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Old 2nd Feb 2016, 08:35
  #329 (permalink)  
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What might be the impact on the overall global helicopter business if CHC were to fail? How rapidly could other operators pick up the slack, and could there even be enough surplus capacity right now to replace them without utilizing any of the existing CHC aviation assets, but just crews as required?

As so much of the fleet is now leased, is it conceivable that the operating entity has become an undesirable commodity, and that the leased assets could be instantly reassigned to other operators, should the organization itself become unviable?
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Old 2nd Feb 2016, 08:39
  #330 (permalink)  
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Put your panties back on...

They have been moved to another stock list... Its not quite the end..
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Old 2nd Feb 2016, 08:43
  #331 (permalink)  
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Old 2nd Feb 2016, 09:10
  #332 (permalink)  
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The stock price is a relatively irrelevant piece of information, based upon the small percentage of the company that is actually owned by these stockholders.

The questions are more focused on the fundamentals of the business, which are quite apparent in each round of financials produced by the organization. It has been haemorrhaging cash for a long time, and while costs are being cut, revenue may be in decline as well, in parallel with the general global oil price collapse.

This is exacerbating the challenges of a successful turn around, which is painful enough, and a horrible situation for a business and it's employees. When you couple a distressed organization with a volatile core business environment and hungry competitors, all bets are off. When you add a global customer base who are already in a bad situation of their own, and looking to aggressively cut costs, adjust or terminate contracts, then there is an entire new dimension.

And perhaps the final unknown might be the reorganization laws for the various entities and businesses within the group? Would this now be under a Canadian, US, Cayman or some other, jurisdiction?
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Old 2nd Feb 2016, 14:57
  #333 (permalink)  
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NO great shakes if CHC go Belly up... yeah a ball ache for the staff but thats the same in any walk of life.... and nobody is to big to go down..

The other operators would circle like vultures and pick over the bones...
Its the capitalist way..
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Old 2nd Feb 2016, 17:39
  #334 (permalink)  
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There's not even a small part of me that thinks CHC are finished. They literally are too big to go under and cease to exist.
I think Lehman brothers imagined the same thing in 2008, and they had 26,000 employees.

nobody is too big to fail
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Old 2nd Feb 2016, 17:50
  #335 (permalink)  
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Mitchaa states:
What makes you think that one of the largest helicopter operators in the world will fail, go bankrupt, shut all the doors and cease to exist? They have yearly contracts that are bringing in over $1bn in a market that is on its ar*e so to speak. Even if it did come down to Bankruptcy, you really think that the company would cease to exist?
Revenue is absolutely no indication of anything in business (or life); margin is everything and the net profit or loss of the organization is the ultimate arbiter. You have to be able to pay your bills and maintain creditworthiness to survive, and funding an ever deepening black hole of losses is not the way to do it, you might never get out.

You only need look at the history of asset and revenue rich businesses that have sought creditor protection or reorganized in order to permit them to renegotiate adverse financial, labour or other conditions. Airlines are perhaps an excellent and appropriate example.

You may be assured that discussions similar to that going on here at PPRuNe, will be taking place within the organization, major shareholders, financiers, leasing companies, insurers, regulators, customers and competitors.

The questions and considerations posed here, may well be put into perspective by a review of the information provided by no other source than CHC itself.


For the sake of all the employees at CHC, I wish them every success in effecting a strong recovery.
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Old 2nd Feb 2016, 18:34
  #336 (permalink)  
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biggest thing for me is no assets.. everything is rented, revenue is falling and looking to be low for some time.
Lets face it if the oil companies renegotiate a price based on todays oil price.
Do you really think in 6 months time when oil triples to its $100 a barrel price said oil companies will freely give you more money ?
not while your arse points down.......
Helicopter companies will be tied in for years at low rates....

Just my take on the snakes that deal with black gold...
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Old 2nd Feb 2016, 19:40
  #337 (permalink)  
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I think it is great that I can come to these pages and get such well informed and professional opinion not available anywhere else. You guys are the best of the best and have no doubt reached the peak of your respective careers
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Old 2nd Feb 2016, 21:12
  #338 (permalink)  
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Hang on i'll get you a chair and make some room at the table for you....
Might be a bit of squeeze with that ego but we accommodate all.....
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Old 2nd Feb 2016, 21:19
  #339 (permalink)  
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Mitchaa states:

Completely disagree.

Response: I respect your opinion, Sir. However my position is simply based on facts provided by the regulatory filings of the company and other publicly available information and my own personal knowledge and experience. I have no desire to see the failure of CHC (and have no affiliation to them now, or in the past), but the pure facts of the matter are pretty serious and apparent.

* There are 2 market leaders in the helicopter transportation business, CHC and Bristows, all other helicopter operators pale insignificant in comparison.

Response: As a global operator, it is extremely vulnerable to local or global competition in many of it's operating arenas. Size can be a benefit or a detractor, dependent on the condition of the parent. Pricing can be the most significant differentiator on any of these contracts, and if you can no longer price strategically and profitably to maintain or grow market share, then the door is wide open to the competition.

* With regards to which company is bigger, it possibly changes year to year but over the last few years, CHC have posted higher revenue figures each year, they are bringing in the most amount of money out of any operator world wide.

Response: The continual reversion to revenue as some kind of indicator of the health and status of the company, is completely deceiving, utterly irrelevant, but perhaps worse, maybe an indicator of the prior management strategy? . Some might suggest that this is precisely what got this organization into this bind - driven by a focus on increasing revenue without maintaining and protecting the fundamentals of the business. The soundest advice I ever received on this subject, was "Revenue is Vanity, Profit is Sanity and Cash is King".

* Name one other market leader anywhere that has ever went belly up and out of business? (Market leader remember please). Nope, you can't, they literally are too big to go under.

Response: OK, I'll bite - Eastman Kodak, but this is yet another irrelevant part of the discussion.! Market rules evolve and change, and any number of huge and pre-eminent businesses have either shrunk, or failed, in many cases reappearing as parts of the whole as they are sold off to support the core organization from folding. General Motors, Chrysler and just about every North American airline have successfully reorganized and returned to the marketplace. Enron never did!

* Where is this ludicrous suggestion coming from in the first place? The relationship to the share price? It's already been established that the majority of the company is not being traded upon, some 80% or so, so why are people getting worked up about a volatile share price in a volatile market?

Response: Agreed, the share price is actually irrelevant as it represents a very small part of the share holding (you may well wish to disagree with that comment if you are unfortunate enough to own this stock), but it is however a very sound indicator and response to the overall condition of the organization. The financials reported by CHC detail exactly what is wrong and the current state of the group. It is not ludicrous, not made up, but purely factual in legally required and certified public documents.

* CHC may post a $100m loss this financial year but many companies involved in oil and gas are. BP have just posted a $6.5bn loss. VW posted a near $2bn loss in a single quarter. Tesco posted a 6.5bn loss last year. What's $100m in the grand scheme of things when revenue is some 15-17x higher?

Response: It is alarming that you could be so cavalier in your attitude to simply brushing aside losses as a percentage of operating revenues, more concerning it has been going on for a long time - this company will not survive with that attitude, and it is clearly not shared by the new management (or board) and their current attempts to restructure the organization. Quoting very specific one time losses from other companies is simply irrelevant, as none of it is in relation to the identifiable cause, their overall operating revenues, the financial condition of the companies prior to these reports, and with consideration to the massive capital investment these organizations commit to, years in advance. The exception might be Tesco which appears to potentially be fraudulent accounting and conceivably may not survive.

First Reserve earlier this year told investors that the roughly $700 million of their cash that it invested in CHC in 2008 was valued at about $56 million at the end of 2014, according to people familiar with the correspondence.
Source. First Reserve?s Funds Pitch South - WSJ

* As for other companies circling around like vultures? You do understand what has to be in place for new contracts yes? Not just aircraft and trained staff, but new bases, spares, hangar space, legal certification and approval and so on and on.

Response: Absolutely. There are local (both regional and global) competitors in every market CHC operates in, many are hungry as they lost work to some competitor or another in the past - anything is possible if the need demands. According to various posts here on this site, as many short term contracts are ending, crews are being laid off and aircraft parked. No company is going to hold onto assets that cost money and produce no revenue - just look at the current restructuring being undertaken by a disciplined and ordered management already at CHC. Hangars can be disposed of or built rapidly. Parts inventories are the bane of all operators, as they tie up massive amount of cash, cost money to maintain and continually depreciate. Parts inventories can be liquidated instantly even at vastly discounted rates and converted into CASH - they are the primary target of every accountant in the helicopter business! Survival changes all the rules.

* If the worst did happen and CHC went bankrupt, that does not necessarily mean the end of the line, they would not cease to operate, all that would happen is a buy out or a change in ownership. They would keep the profitable parts of the business that are making money and the existing infrastructure and staff.

Response: Totally agree, but again, anything is possible. It may see a smaller core business recovering from the influx of cash from the disposal of operating units and assets. There is a massive amount of cash floating around the globe right now, due to the poor performance of so many markets and businesses. However, no buyer will be found for the organization unless the business fundamentals are stabilized and turned around. The only way a distressed company will ever find a buyer is if it is discounted enough to allow the purchaser to recoup the money they will have to invest to turn it around.

* There's not even a small part of me that thinks CHC are finished. They literally are too big to go under and cease to exist.

Response: I admire your confidence. Personally, I would never make a statement like that, or subscribe to it. In business or life, anything can happen. In survival and turn around mode, all the rules are gone, anything and everything is on the table for discussion and on the block for sale. CHC has liquidated assets, ploughed in more cash, sold part of the company to a new investor and is still burning up cash on a daily basis. I do sincerely wish you all well, I would not like to see CHC fail.

Only time will tell.
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Old 3rd Feb 2016, 05:55
  #340 (permalink)  
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Ah, at last. A well thought out and accurate post. Thank you Rotor Rooter for laying things down clearly and accurately.

The comments on this forum were driving me to distraction with delusional opinions that for some reason CHC was too big to go under, or that somehow a white knight was going to come in and save a company with very few assets, poor contracts, huge debts and a business model that keeps losing money.

Unfortunately, poor management, a business strategy that prioritised market share and revenue, spread itself too thin and lost money - Survived through a boom time in the industry but when the market turns, had no fat left to survive on.

I was going to mention Barings (not that big, but very high profile) and Enron, but Kodak is the perfect example. Xerox, Hoover, Kodak - All names that became the generic title for their industry, and now exist pretty much by name alone.

Arrogance and a lack of understanding that any company can fail, is the kind of mentality that pushed many successfully companies to the brink.
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