Offshore services provider Bristow Group warns it may be forced to file for bankruptcy without a significant change in its financial standing, according to an April 15 Securities and Exchange Commission (SEC) filing.
The Houston-based company, which is heavily in debt, is “exploring strategic alternatives to strengthen our balance sheet and to preserve and maximize the value of the company while remaining to providing safe, reliable service to our customers,” the SEC filing reads. Bristow also has hired financial and legal counsel to assist in “analyzing various strategic financial alternatives to address our liquidity and capital structure” and to restructure debt.
Those options include Chapter 11 bankruptcy, the company says.
“Bristow is working diligently with its financial and legal advisors to best position the company for the future, both financially and operationally,” Bristow President and Chief Executive Officer L. Don Miller said in a prepared statement. “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.”
As of April 12, Bristow had about $202 million aggregate cash on hand, a 15 percent decrease from $237 million on Dec. 31, according to the SEC filing. The company attributes the decline in liquid assets to the “prolonged downturn in the offshore oil and gas market, our levels of indebtedness, lease and aircraft purchase commitments and certain other commercial contracts.”
The company is facing “substantial” interest payment obligations on its debt and aircraft lease/purchase agreements over the next year. It has decided to exercise a contractual right to a 30-day grace period to not make a $12.5 million interest payment on the 6.25 percent senior unsecured notes maturing in 2022.
“If we are unable to execute transactions to improve our financial condition, we do not believe we will have sufficient liquidity to conduct our business operations based on existing conditions and estimates during the next twelve months,” the filing states. “If we become insolvent, investors in our common stock may lose the entire value of their investment in our business.”
On the heels of a pervious restructuring to cushion the impact of the oil and gas market downturn and the uneven recovery of those markets, Bristow last November signed a $560 million acquisition of privately held Columbia Helicopters, a provider of heavy-lift helicopter operations and maintenance, repair, and overhaul (MRO) services.
The acquisition, which would have been the largest in company history, was canceled in February as it took hit after hit from the declining offshore market. Bristow unit losses and acquisition costs tanked the company’s total liquidity by nearly 38 percent from $380 million last March to about $237 million at the end of last year. The company reported a net loss of $85.9 million — $2.40 per diluted share — for the December 2018 quarter, compared to a net loss of $8.3 million- — .23 per diluted share — for the December 2017 quarter.