Milestone in new leasing deal for CHC helicopters

Milestone Aviation Group has agreed to provide finance for the restructuring of CHC Group, a global leader in providing helicopters to the oil and gas industry and emergency services, and which filed for Chapter 11 earlier this year after being hard hit by the downturn in the energy market.

CHC announced that it has entered into a plan support agreement (PSA) for a comprehensive recapitalization of the company that will provide $300 million in new capital from its existing creditors, as well as terms for restructured aircraft leases and additional asset based financing commitments of $150 million from Milestone, its largest lessor, and its affiliates.

The company expects to submit the plan to the court in the next few weeks and anticipates emerging from the court-supervised process as quickly as possible with forecasted liquidity of more than $400 million and access to an additional $150 million of aircraft financing.

“Executing this agreement enables us to establish a stronger capital structure for CHC and is another critical milestone toward completing our court-supervised reorganization process,” said Karl Fessenden, president and chief executive officer. “We remain confident that the restructuring we are undertaking will position CHC to capitalize on future growth opportunities as our industry recovers.”

Modified lease terms

Under the lease restructuring deal, Milestone will serve as the lead lessor for CHC’s go-forward fleet of helicopters. Milestone will provide CHC with modified lease terms on their existing leases and additional helicopters at market lease rates. In addition to the leased aircraft, the agreement includes provision of a commitment letter for a new $150 million asset backed debt facility for purchase or refinancing of aircraft.

“From the outset, one of our primary goals has been to establish a smaller, more productive fleet of aircraft that provides the right aircraft at the right time for our customers’ helicopter service needs, while maintaining our commitment to setting the standard for safety, customer service and value across the industry. We believe that Milestone, as a part of GE, provides the strength and stability we need in a lessor partner, and we are confident that this agreement provides a strong foundation for CHC’s fleet of aircraft going forward,” Fessenden concluded.

“As the pioneer of global helicopter leasing, Milestone Aviation Group has always taken a long-term view of the helicopter industry, and we are committed to the industry’s health and stability during a challenging time,” said Milestone president Daniel Rosenthal. “We believe that an agreement that enables CHC to recapitalize and emerge from its restructuring process as a going concern is important for our industry, and we are pleased that Milestone, along with other major creditors, has reached a mutually acceptable agreement with CHC to restructure its obligations.”