Offshore helicopter specialist Bristow Group announced that the company and some of its subsidiaries are considering chapter 11 bankruptcy as a viable option to end its debt problems.
Bristow Group has a long-term debt of nearly £1.1 billion (US$1.5 billion) including interest, and on 16 April, the firm said that it had brought in financial advisors to ‘address our liquidity and capital structure, including strategic financial alternatives to restructure our indebtedness’. The firm has also deliberately missed a £9.5-million interest payment deadline and delayed reporting its third quarter results for this financial year. Bristow Group blames the company’s financial situation on a ‘prolonged downturn in the offshore oil and gas market’ and the company’s ‘levels of indebtedness, lease and aircraft purchase commitments and certain commercial contracts’.
The firm operates a global fleet of oil and gas transport helicopters and carries out SAR operations on behalf of the UK Coastguard – 900 people are employed by Bristow’s UK branch, though a spokesperson has assured the press that these divisions will not be affected by the proposed bankruptcy.
Bristow Group has said that the chapter 11 bankruptcy route – which lets firms continue trading while paying off debts – was being considered as part of its bid to address its debt, as well as the ‘weaknesses’ identified relating to helicopter lease agreements. And this is not the first time that this course has been taken – CHC Helicopter also filed for chapter 11 bankruptcy back in 2016 and survived it thanks to financial restructuring. That being said, the firm has warned that chapter 11 bankruptcy process would require significant management time, and that customers and suppliers could bail as a result.
A spokesman for Bristow Group said that no final decisions had been made and noted: “We are working with financial and legal advisors to best position the company financially and operationally – that means we are analysing various strategic financial alternatives to address our capital position, including strategic and refinancing alternatives to restructure our debt and other contractual obligations.”
In a recent financial update released on 15 April, Bristow President and Chief Executive Officer L. Don Miller stated: "The steps we are announcing today will afford us additional time to continue our efforts to complete our financial reporting process and address our capital structure. Most importantly, we are, as always, focused on continuity of service in a safe, reliable and professional manner for our valued employees, clients and passengers, as we continue to navigate a challenging market.”
Currently, Bristow Group is to defer a $12.5-million interest payment that was due on 15 April for a period of 30 days and has also been granted further extension from its lenders before filing its quarterly accounts for the period ending 31 December. In addition, its grace period that was previously extended to 15 April has been pushed forward until 19 June.
The Maritime and Coastguard Agency has also weighed in on the news, insisting that it has ‘protections in place in the unlikely event that the contract cannot be filled’.