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Recapping the Bankruptcy, Divestment, Acquisitions in Rotorcraft of 2017

By S.L. Fuller | December 27, 2017
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Bankruptcies, restructures — 2017 hosted some significant business moves. Among the highlights recapped in R&WI's January 2018 issue, here are some of the most notable.

Erickson S-64

Erickson Inc. is in the process of upgrading its S-64 Aircrane fleet. Photo courtesy of Erickson

Bankruptcies

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CHC Group’s plan to emerge from Chapter 11 of U.S. Bankruptcy Code was approved by the U.S. Bankruptcy Court of the Northern District of Texas in March. The operator had already been working toward a restructure, having filed for bankruptcy May 2016. Since that time, CHC introduced a logo and website with a look that it said aims to capture both its early roots as Okanagan Helicopters (as this 2017 is its 70th anniversary) and its current presence in the industry. In July, CHC finalized its board of managers, following the completion of its financial restructuring.

The U.S. Bankruptcy Court for the Northern District of Texas also approved a plan of reorganization in March for Erickson Inc, which had filed under Chapter 11 less than five months prior. Under the plan, Erickson was to reduce its pre-bankruptcy debt by more than $400 million upon emergence. Erickson emerged from bankruptcy protection in May. Effective immediately, Erickson proceeded as a privately held small business. Doug Kitani became Erickson’s new CEO and director Oct. 31.

Photo from file

Divestment

Elsewhere in the world in March, India's civil aviation ministry was reviewing bids by asset-valuation firms to conduct reviews of Pawan Hans Ltd. as part of the government's plan to sell that state-controlled operator and transfer management of it to new investors. India plans to sell its 51% stake in the company as part of a strategy to raise 725 billion rupees (about $10.9 billion) this fiscal year in the divestment of what it calls central public sector enterprises. Oil and Natural Gas Corporation Ltd. of India holds 49% of Pawan Hans. The sales proposal came as Pawan Hans has outlined a tripling of its fleet, in part to support the government’s Regional Air Connectivity Scheme — an effort to bring low-fare, subsidized flights to underserved areas of India. The plan understandably provoked resistance from Pawan Hans employees, and the overall effort to sell off state-owned enterprises has been criticized by some officials in government ministries opposed to giving foreign investors control over those outfits.

In June, Bristow Group announced it would be reorganizing its structure and business operations, dropping a global approach to air services and narrowing its pursuit into new business areas to focus on meeting offshore energy firms’ demands for greater efficiency in specific world regions amid a chronically severe downturn. Under the plan, Bristow planned to reduce its corporate headquarters operation in Houston, Texas, cutting its overhead costs to 12% of revenue and splitting its global structure into two regional hubs. Many executives have left Bristow as a result and others were expected to follow. In November, Bristow announced it has sold Bristow Academy to a "private entity" as part of its “aggressive portfolio management efforts to improve returns, liquidity and credit quality." That sale included all Bristow Academy aircraft.

Photo from file

Acquisitions

Oct. 5, Boeing announced its intention to acquire Aurora. The deal was official Nov. 8. The new Boeing company retains an independent operating model. Matthew G. Hutchison is Aurora's COO. Former COO Mark C. Cherry was named head of Boeing Phantom Works shortly after the acquisition was announced. Hutchison had been serving as Aurora's VP for engineering. Aurora is now a subsidiary under Boeing Engineering Test & Technology. This deal gives Boeing an entry into the urban mobility movement, as Aurora is an official Uber Elevate partner.

PHI Inc. in October announced plans to acquire HNZ Group’s offshore business in New Zealand, Australia, the Philippines and Papua New Guinea. PHI said the deal values HNZ Group at $187.9 million, based on the number of outstanding shares as of Oct. 30.

Vector Aerospace officially became part of StandardAero in November. Airbus finalized the acquisition that had been announced in July. The two companies were to merge under the “StandardAero” name. Annual revenues for the new firm, according to Airbus, is $3 billion. It has more than 42 locations across five continents. With the acquisition, StandardAero becomes a giant in its field. It is owned by the private equity firm Veritas Capital, which acquired the company two years ago for a reported price of $2.1 billion. StandardAero, before the acquisition, employed more than 3,500 in a dozen major facilities in North America, Europe, Asia and Australia, and had 13 more regional service and support centers.

 

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