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CHC Group Plan Filed

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CHC Group filed with the U.S. Bankruptcy Court a Joint Chapter 11 Plan of Reorganization and related Disclosure Statement.

According to the Disclosure Statement, “The Plan is a global settlement and avoids litigation over numerous complex issues, including, without limitation: the amount, value, and treatment of all Claims against the Debtors; the validity, extent and priority of the Liens securing the Senior Secured Notes; the value of the Debtors’ unencumbered Assets; any potential adequate protection or diminution in value Claim by the holders of Senior Secured Notes; any potential Claim to surcharge Collateral under section 506(c) of the Bankruptcy Code; and the Plan Equity Value and the total enterprise value of the reorganized company.”

The Disclosure Statement continues, “The Plan is also value-maximizing for all stakeholders. Among other things the Plan: provides for a $300 million new money investment through the fully-backstopped Rights Offering; reduces the Debtors’ prepetition debt by approximately $925 million (prior to conversion of all of the New Second Lien Convertible Notes and by $1.4 billion subsequent to such conversion); reduces the Debtors’ annual Cash interest burden by 85%, which frees up approximately $115 million in annual cash flow that can be used for reinvestment in the Debtors’ business; and provides for a right-sizing of the Debtors’ fleet.”

In addition, “On the Effective Date, approximately $30.8 million in additional New Second Lien Convertible Notes will also be issued to the Backstop Parties in exchange for undertaking the Backstop Commitment, making the aggregate principal amount of New Second Lien Convertible Notes issued approximately $464.1 million. On an as converted and fully diluted basis (but subject to dilution for the Management Incentive Plan), the New Second Lien Convertible Notes represent 85.4% of the New Membership Interests. Pursuant to the Rights Offering, the $300.0 million investment will be allocated $280.0 million to the holders of Allowed Senior Secured Notes Claims and $20 million to the holders of Allowed Unsecured Notes Claims.” The Court scheduled a December 20, 2016 hearing to consider the Disclosure Statement, with objections due by December 12, 2016.

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