US-headquartered offshore helicopter specialist Bristow Group has issued a stark warning that the company faces insolvency unless it is able to implement a financial turnaround.

In a filing to the US Securities and Exchange Commission, the Texas-based company says that it has employed financial and legal advisers to examine the options to "address our liquidity and capital structure, including strategic financial alternatives to restructure our indebtedness".

Bristow S-92 line

Bristow Group

However, in an update to the risk factors facing the company, it cautions: "If we are unable to execute transactions to improve our financial condition, we do not believe we will have sufficient liquidity to conduct our business operations based on existing conditions and estimates during the next 12 months."

Options being explored include Chapter 11 bankruptcy protection, the operator says. However, it warns that significant management time would need to be expended on the process, and customers and suppliers could also jump ship.

Bristow Group blames the company's parlous financial state on a "prolonged downturn in the offshore oil and gas market”, as well as "our levels of indebtedness, lease and aircraft purchase commitments and certain other commercial contracts".

Liquidity at 12 April stood at $202.1 million – a 15% fall from the figure of $236.9 million at 31 December 2018.

As part of the financial options being explored, Bristow Group has elected to defer a $12.5 million interest payment that was due on 15 April, for a period of 30 days.

In addition, the company has been granted a further extension from its lenders before it needs to file its quarterly accounts for the period to 31 December. Bristow had previously secured a grace period until 15 April, but that has now been pushed out until 19 June.

A failure to file those accounts within a given time period constitutes a default on its loans.

Bristow Group stock has collapsed on the disclosure and is currently trading at below $0.50, giving a market capitalisation of around $17 million.

The group operates a global fleet of oil and gas transport helicopters, as well as running a search and rescue contract in the UK on behalf of HM Coastguard.

In addition, it owns fixed-wing providers Airnorth and Eastern Airways, based in Australia and the UK, respectively.

Rival US helicopter provider PHI applied for US Chapter 11 bankruptcy protection on 15 March.