Chc Sold!!!
 

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.

Memo from CHC Management - As you are aware...NOT!!!
 

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

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..

Hummingbird feels a little numb.....wingless even!
 

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?

Uh...oh the Herd is Spooked....
 

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:}

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

who's driving this wagon now?
 

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....

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

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?

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.

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

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.

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

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. ;)

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).

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.

It's Down Hill from here!
 

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?

Clegg's memo
 

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.

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?

Chopped And Diced
 

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"