Commercial

Offshore Provider Bristow Files for Chapter 11 Bankruptcy Protection

By Frank Wolfe | May 14, 2019
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An S-92 in offshore service with Bristow Group.

Nearly a month after Bristow Group warned investors about its financial situation, the offshore services provider filed for Chapter 11 bankruptcy protection on May 11 in United States Bankruptcy Court for the Southern District of Texas.

Chief U.S. Bankruptcy Court Judge David Jones is to hold a first hearing on the case on May 14.

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Bristow said it is asking for nearly $6.3 million in “first-day” relief, including authority to pay employee wages and benefits, vendors and suppliers for goods and services in the near future. The company has 3,000 employees worldwide, including 558 in the United States, Trinidad, and Guyana who would continue to receive wages and benefits under the "first day" relief. Other than Trinidad and Guyana and Bristow's two Cayman Islands subsidiaries, the Chapter 11 protection would not apply to Bristow's non-U.S. entities.

"As of May 10, 2019, we had approximately $155 million in aggregate cash on hand, including the proceeds of a $75 million term loan from a group of Bristow’s senior secured noteholders that was made prior to filing," Adam Morgan, a Bristow spokesman, wrote in an email. "This level of liquidity is sufficient to run our business, and we expect to maintain sufficient liquidity throughout the restructuring process to maintain our business operations, including paying our employees globally."

Bristow CEO Don Miller said that his company's operations will continue as usual during the Chapter 11 process.

Miller said that Chapter 11 "will allow us to strengthen our balance sheet, achieve a lower and more sustainable debt level and emerge as a stronger company."

On May 11, Bristow said, in addition to the $75 million from "senior secured noteholders," it had received a commitment for another $75 million in "debtor-in-possession financing to support normal course operations."

"We have the support of the overwhelming majority of our parent company senior secured noteholders, with whom we have entered into a Restructuring Support Agreement that will help to de-lever our balance sheet, and we are actively working with other important stakeholders as we enter this process,” Miller said.

On April 12, Bristow had about $202 million aggregate cash on hand, a 15 percent decrease from $237 million on Dec. 31, according to an SEC filing last month. The company attributed 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.”

On the heels of a previous 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 Bristow 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- — $0.23 per diluted share — for the December 2017 quarter.

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