CHC Helicopter Tendering Shares in Initial Public Offering
CHC Group is going public and has begun an initial public offering (IPO) of 29,412,000 of its ordinary shares. The company, parent of CHC Helicopter, will make all of these shares available in the IPO, which is expected to price at $16 to $18 per share. If the underwriters sell more than the allotted shares, they will be able to buy up to 4,411,800 additional ordinary shares at the IPO price, less underwriting discounts, according to CHC. The company’s symbol on the New York Stock Exchange will be HELI.
Vancouver-based CHC specializes in helicopter support for oil-and-gas companies and government search-and-rescue agencies and helicopter maintenance through its Heli-One division (Booth No. 1804). CHC Helicopter operates about 240 aircraft in about 30 countries, according to the company.
CHC reported a drop in revenue and earnings in its Fiscal Year 2014 second quarter report, with revenue for the quarter at $443 million, down 1 percent compared to the same period in Fiscal Year 2013. The company had a net loss of $49 million; net earnings were $7 million during the same period last year. The revenue drop is attributed to lower availability of the EC225 fleet and the higher costs needed to return those helicopters to service. Two EC225 ditchings in 2012 led to operating restrictions on the model, which were lifted after gearbox modifications were incorporated. “I’m proud of the leadership CHC brought to that work, and the ability of our people to minimize disruption to customer operations while those aircraft were suspended from flight during the past year,” said CHC president and CEO William Amelio.
During the second fiscal quarter 2014, oil-and-gas, search-and-rescue and EMS flying revenues climbed 1 percent to $408 million. Countries where flying revenue grew include Australia, Ireland, Malaysia, Norway and the Philippines, while Brazil saw “a sales decline…attributable to customers electing to resume EC225 flights more slowly than elsewhere.”
Other business highlights include a two-year extension of an agreement for services to Statoil at bases in Bergen and Florø in Norway, using a fleet of 10 heavy helicopters; the government of Nigeria has approved CHC joint venture partner Atlantic Aviation to import AW139s; in Tanzania, CHC received an air operator certificate to fly AW139s and S76C+ helicopters instead of operating based on customer-held permits; CHC ordered nine additional S-92s, with options for another 15; and CHC signed an agreement to buy $100 million worth of helicopters from Airbus Helicopters by the end of 2016.
On the maintenance side, Heli-One sales to third-party customers dropped 17 percent to $35 million during the quarter, with EBITDAR (earnings before interest, taxes, depreciation, amortization and aircraft rental costs) down 45 percent to $16 million. According to CHC, “Similar to in Q1, Heli-One’s EBITDAR was negatively affected by costs incurred to prepare EC225s to return to service, as well as costs necessary to maximize availability of other CHC aircraft.”