Bristow Group has bowed to the inevitable and entered Chapter 11 bankruptcy protection as the offshore helicopter specialist attempts to restructure its crippling debt load.
The Chapter 11 filing, dated 11 May, covers only six US- and two Cayman Islands-registered businesses, with overseas operations – including Bristow Helicopters in the UK – unaffected.
Bristow Group says all its subsidiaries will continue to operate as normal while the financial restructuring is carried out.
Don Miller, Bristow chief executive – and the group's former chief financial officer – says that it opted for Chapter 11 after "careful deliberation and a thorough review of strategic financial alternatives".
"Chapter 11 will allow us to continue normal course operations while we reorganise our financial structure, which is a critical step towards best positioning our company financially and operationally for the long term," he says.
Miller says the company has the support of "many of our senior secured noteholders" and continues to hold "meaningful" discussions with other debt holders.
"Our day-to-day operations will continue in the ordinary course of business; continuity of service is paramount," he says.
"Importantly, we will continue to operate business as usual throughout this financial restructuring process and we remain committed to providing safe, reliable and professional service."
As of its most recent financial filing – covering the three months to 30 September 2018 – Bristow Group’s total debt stood at $1.44 billion. The company embarked on an aggressive expansion earlier this decade, just as crude oil prices dropped, leading customers to cut back on their transport requirements.
As well as performing offshore transport operations in the North Sea, subsidiary Bristow Helicopters operates a search and rescue contract in the UK on behalf of the Maritime and Coastguard Agency (MCA), one of the few profitable parts of the business.
"The current difficulties are contained within Bristow Group and do not affect the Department for Transport's contract with Bristow Helicopters," says the MCA.
"Bristow Helicopters continues to fulfil its contractual obligations with the UK Government. The [department] has protections in its contract to guarantee a search and rescue helicopter service in the unlikely event these obligations should go unfulfilled."
The move into Chapter 11 is a blow for activist shareholder Global Value Investment (GVIC) which had been pressing the company to consider alternatives to the restructuring process, which wipes out shareholders.
Bristow Group also owned interests two fixed-wing carriers – Airnorth in Australia and Eastern Airways in the UK. GVIC had presented its plan for Bristow in the run-up to the company's entering Chapter 11. It estimated that the sale of the two airlines alone could generate up to $230 million.
Eastern Airways has since been sold, in a deal completed on 10 May, Bristow confirms.
Article update to include additional information on Eastern Airways