Bristow Hints At Bankruptcy, Drops Columbia Deal

 - February 11, 2019, 5:45 PM

Bristow Group broadly hinted on Monday that its next move could be bankruptcy. The company abruptly canceled an analyst conference call scheduled for this afternoon, formally ended its attempt to acquire Columbia Helicopters for $560 million, filed notification of late filing of latest quarterly and nine-month financial results with the U.S. Securities and Exchange Commission, and admitted “material weakness” in internal controls over financial reporting dating back at least two years. 

In a statement, Bristow said, “The company is evaluating whether this material weakness in internal controls over financial reporting resulted in a misstatement in the company's financial statements included in the annual report on (SEC) Form 10-K for the fiscal year ended March 31, 2018, and the impact on the financial statements of the company as of December 31, 2018, including disclosures. The company is specifically evaluating whether certain debt balances should be reclassified from long-term to short-term in those financial statements, whether related waivers can be obtained from lenders, if necessary, and the resulting impact on the assessment of the company's ability to continue as a going concern.”

The helicopter services company did release “preliminary” financial results that indicated it lost at least $262.2 million for the nine months ending Dec. 31, 2018, and $85.94 million in the fourth quarter alone. Those losses, if confirmed, are up sharply—it sustained losses of $94.78 million and $8.274 million, respectively, in the same year-ago periods.

In announcing the collapse of the Columbia deal, Bristow Chairman Thomas Knudson said, "The decision to enter into a mutual termination of the purchase agreement was based on a number of developments following the entry into the agreement, which led both Bristow and Columbia to conclude that it was not possible to combine the two companies at this time.” Bristow has paid Columbia a $20 million termination fee. Bristow announced its intention to acquire Columbia in November, but revealed a month later that it was having difficulty closing the deal.