MD Helicopters has entered into an Asset Purchase Agreement with a creditor consortium to sell nearly all of the company’s assets and has filed for reorganization under Chapter 11 bankruptcy rules.
The consortium, led by investment firm Bardin Hill and financial services company MBIA Insurance, will acquire nearly all of MD Helicopters’ assets.
In connection with the proposed sale transaction, MD Helicopters has received a commitment of approximately US$60 million in debtor-in-possession (DIP) financing from Bardin Hill and MB Global Partners. Upon court approval, this new financing, together with cash generated from MD’s ongoing operations, is expected to support the business throughout the sale process.
In a statement released by MD Helicopters, the firm said that the consortium will also ‘provide new financial capital to strengthen MD’s financial position’ and support its ‘continued ability to manufacture and service its high-performance helicopters’.
MD Helicopters wants quick and orderly sale
By filing for voluntary Chapter 11 reorganization, MD Helicopters aims to facilitate a ‘quick and orderly sale’ through a ‘court-supervised sale process’.
In conjunction with the filing, MD Helicopters has also filed a number of customary motions with the court seeking authorization to continue operations during the sale process, including the authority to:
- Continue paying employee wages and benefits
- Honor customer commitments and programs, and
- Continue paying the existing claims of key vendors.
Consequently, MD Helicopters expects to continue regular operations throughout the sale process, serving clients and dealing with suppliers as normal.
The firm also stated: “Accordingly, the proposed transaction with the consortium is subject to higher or otherwise better offers, court approval and other customary conditions.”
‘Moving forward with new ownership’
“Since last year, we have been exploring a potential sale of the Company that would enable us to move forward with new ownership to support MD’s continued manufacturing operations and maintenance services long into the future, as well as deleverage our capital structure,” said Alan Carr, Sole Director and Chairman of the Board of MD Helicopters.
“After a thorough review of the options available to us, we believe this transaction and court-supervised process will help achieve our objective and create the best path forward for MD and all our stakeholders. We are as dedicated as ever to meeting our customers’ high expectations no matter the mission, and we appreciate the hard work of our employees as we take this important step to position MD for the future.”
MD Helicopters recently won Helicopter Association International’s (HAI) 2022 Salute to Excellence Humanitarian Service Award at this year’s HAI Heli-Expo, for work providing relief to the Navajo Nation during the coronavirus pandemic.