A U.S. bankruptcy court has approved CHC’s request to reject immediately leases on 16 Airbus Helicopters, 12 Leonardo-Finmeccanica and 10 Sikorsky aircraft as part the company’s planned reorganization under Chapter 11 protection from creditors, according to the company.
CHC said the court in Dallas approved “first day” motions filed May 5 with its petition for reorganization under Chapter 11 of U.S. bankruptcy laws that included the lease-rejection request. Other such motions cleared by the court allow CHC to keep its bank accounts; provide employee salaries, healthcare coverage and other benefits; and to continue making cash transfers among the company and its subsidiaries.
The company said it “expects to maintain sufficient liquidity throughout the restructuring process” to keep day-to-day operations running “without interruption.”
CHC President and CEO Karl Fessenden said the court’s approval of the first-day motions “should provide our customers, suppliers, and employees with confidence in CHC’s ability to continue normal business operations worldwide throughout this court-supervised reorganization process.”
He added, “Our objective is to establish a competitive capital and operating structure, enabling CHC to remain a world-class helicopter service provider … that continues to set the standard for safety, customer service and value.”
CHC’s reorganization petition covers it and 42 subsidiaries and affiliates around the world, including operations in the U.S., Canada, the Cayman Islands, Barbados, the Netherlands, Norway and the U.K.; maintenance unit Heli-One’s operations in the U.S., Canada, the Netherlands, Norway and the U.K.; and various Lloyd Helicopters operations.
The major helicopter company proposes to dispose of 90 of the 230 helicopters in its fleet by about July 4 and to reduce its total fleet to 75 aircraft by 2017. CHC’s court filings said it owns 67 of its 230 aircraft.
Under that part of its plan, CHC said, the court approved the immediate rejection of leases on 13 Airbus AS332L2s, six EC225s, one AS332L and one EC155B1. It said the court also cleared it to end leases on 12 Leonardo-Finmeccanica AW139s and eight Sikorsky S-76C++ and two S-76C+ aircraft. (Leonardo is the new corporate name of AgustaWestland parent Finmeccanica.)
CHC plans to return to lessors four more AS332s, 14 more EC225s (or H225s), seven more AW139s and seven more S-76s. It also plans to reject leases on 16 S-92s.
Lessors impacted by the court’s order, according to CHC’s filings, are Element Capital, GE Capital, Leonardo-Finmeccanica, Lobo Leasing, Lombard North Central, Macquarie Rotorcraft, Milestone, Parilease SAS, Sandycove Aviation and SpareBank 1.
CHC’s advisors on the bankruptcy filing include the New York City-based Seabury Advisory Group. That group includes Vice Chairman Michael Cox, who told the court he has been involved in more than 30 airline restructurings. They include the Chapter 11 reorganizations of American Airlines, Continental Airlines, Northwest Airlines and both US Airways’ first and second reorganizations.
Photo courtesy of Gary Watt