Waypoint Leasing's fleet includes heavy helicopters like the Airbus Helicopters H225. Photo courtesy of Waypoint
Waypoint Leasing has voluntarily filed under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court Sunday to finish selling its assets to repay $1.1 billion in funded debt, the company said Monday.
According to the petition filed in the Southern District of New York, bankruptcy schedules as well as the summary of assets and liabilities are due Dec. 10.
Waypoint said it has run a sale process over six months before the filing and received bids from six parties, which have not been disclosed. It expects to use the bankruptcy process to find a new owner for the company, a company press release said.
“Waypoint’s Chapter 11 filing is the next step in our holistic transformation strategy and will provide us with the opportunity to emerge with a stronger, sustainable and more competitive balance sheet,” said CEO Hooman Yazhari. “It will further catalyse our ability to implement many of the innovative and evolutionary changes to our business model, allowing us to meet head-on the challenges and opportunities, which our displaced industry presents."
Waypoint aims to provide no interruptions in customer support, though the extent of the impact to its operations will become more apparent once it files its motion seeking approval of a potential sale.
Waypoint is one of several helicopter companies that experienced a decline in business resultant from the downturn in offshore oil drilling, which accounted for Waypoint's primary area of business. CHC Helicopter, Erickson and Bristow made similar financial filings in recent years.
CHC filed for bankruptcy protection in 2016 and has since emerged with a recapitalization plan, a new logo and rebranding, and a new board of managers. As Waypoint's largest customer, accounting for 53 percent of the company's annual operating revenues, CHC's own bankruptcy proceedings subsequently affected Waypoint's operations, noted Sara Tapinekis, a legal analyst with credit market analysis provider Debtwire.
"The reduction of fleet size and the number of leased aircraft by [Waypoint's] largest client base has resulted in an oversupply of available helicopters in the market," Tapinekis said. "As of the date of the bankruptcy filings, [Waypoint's] total fleet utilization was approximately 78 percent — down from 94 percent to 100 percent utilization rates enjoyed between 2013 and 2015."
Erickson in 2017 emerged from bankruptcy protection as a private small business. Earlier this month, Bristow, also a Waypoint customer, said it will purchase Columbia Helicopters in an effort to cushion the impact of the oil market downturn.
Another offshore market player, PHI Inc., is also keeping a close eye on the oil market. Some shareholders of PHI are encouraging the company to sell its air medical division given a potential rebound in the oil and gas business.
Founded in 2013 and headquartered in Limerick, Ireland, Waypoint has eight offices around the world and a fleet of 165 aircraft flying with 36 customers for mission segments in oil and gas, emergency medical services, firefighting, search and rescue, and wind farm support, among others.
Its fleet comprises Sikorsky, Bell, Airbus Helicopters and Leonardo rotorcraft, amounting to a $1.5 billion value, Tapinekis said.
The first hearing for the bankruptcy proceedings is scheduled for Dec. 6.