CHC Group, parent company of offshore transportation specialist CHC Helicopter, is planning a US stock market flotation, the proceeds from which are earmarked for “debt repayments and general corporate purposes”.
No timeline for the initial public offering has yet been revealed; nor have the price range or number of shares likely to be made available. However, the group’s owner, US investment fund First Reserve, says following any sale it will “continue to own a majority of the voting power of ordinary shares”.
For the three months ended 31 July 2013, net debt rose to $1.55 billion from $1.32 for the same period a year earlier. Its debt to EBITDA ratio sits at 5.4:1, a slight improvement on the 5.6:1 recorded in the previous year.
Nonetheless, the company is confident its position in the market as one of the two biggest helicopter operators involved in the offshore transportation segment and the potential for growth in that sector make it an attractive investment proposition.
“We believe that the adoption of more complex services on ultra-deepwater and deepwater installations, increased regulatory oversight of these installations and more frequent rotation of increasingly larger crews at regular intervals will further drive customer demand for heavy and medium helicopters, which comprise all our fleet,” says its IPO prospectus.
It has also moved to further bolster its fleet, signing for nine Sikorsky S-92s with options for a further 15 aircraft. Chief executive William Amelio told analysts on its first-quarter earnings call that the new rotorcraft will be offshore work and “perhaps search and rescue flights as well”.
Delivery of the first five helicopters will take place in 2015, with the remainder due the following year. The options cover the period between 2015-2018.
The latest commitment follows a deal last year for 10 AgustaWestland AW139s and an order in 2011 for 20 Eurocopter EC255s, with an additional four options.
It is likely CHC has exercised these options, too. In the IPO prospectus it notes the S-92 order and then refers to a recent “commitment to purchase $100 million of heavy helicopters from Eurocopter”. With the list price of an EC225 at around $25-$30 million, this would point towards the extra aircraft being firmed up.
No-one from CHC or Eurocopter was immediately available to comment, however.