In the strongest hint yet that bankruptcy is on the table, helicopter services company Bristow Group said on Monday that it has yet to complete its financial report for the quarter ended Dec. 31, 2018, intentionally missed a $12.5 million interest note payment due April 15, and “is working diligently with its financial and legal advisors to best position the company for the future, both financially and operationally,” according to new CEO L. Don Miller.
Bristow also said it has hired the firms of Houlihan Lokey and Alvarez & Marsal as its financial advisors and Baker Botts L.L.P. and Wachtell, Lipton, Rosen & Katz as legal advisors. These firms all have strong bankruptcy experience. Notably, Alvarez & Marsal was hired to manage the distressed Zohar funds used to finance Lynn Tilton’s Patriarch Partners and its stable of companies, including MD Helicopters, in 2016. Investment banking firm Houlihan Lokey is also advising PHI Inc. on its recent bankruptcy filing.
The company stressed it still had $202 million on hand in cash and available credit under its asset-backed revolving credit facility (ABL), down from $237 million at the end of last year. Concurrent with its statement on Monday, Bristow filed an 8-K form with the U.S. Securities and Exchange Commission (SEC). Publicly-traded companies are required to file an 8-K whenever they have “unscheduled material events or corporate events.”
In its 8-K filed Monday, Bristow disclosed its survival strategy of selling off assets and renegotiating with lenders might not succeed and that a Chapter 11 bankruptcy filing might be inevitable. “We cannot assure you that any of our strategies will yield sufficient funds to meet our ongoing liquidity needs,” the company wrote. “We and certain of our subsidiaries may elect to implement such a transaction (default) through Chapter 11.”
Following the 8-K filing and announcement late Monday afternoon, Bristow’s stock nosedived from $1.14 to $0.59 per share in after-hours trading. Bristow said its overdue quarterly financial report would not be filed until June 19 “subject to certain conditions.” The company said it is taking advantage of a 30-day grace period not to pay the $12.5 million senior note interest “as it continues to work on its overall financing arrangements.”