CHC Group and certain of its wholly-owned subsidiaries have filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code.
The filing comes only days after one of the company’s helicopters crashed near Bergen, offshore Norway killing eleven offshore workers, and two pilots, prompting the Norwegian Civil Aviation Authority to ground all EC225 type helicopters.
According to the company, the reorganization is expected to strengthen CHC’s financial position by reducing long-term debt and enhancing financial flexibility while allowing the company to manage and operate its fleet of aircraft.
CHC said it expects day-to-day operations to continue without interruption throughout the court-supervised reorganization process. The company also added it expects to maintain sufficient liquidity throughout the reorganization process to maintain its business operations.
In a statement on Thursday, the company said that, like many companies in the oil and gas industry, CHC’s operations have been significantly affected by the dramatic decline in oil prices since their peak in 2014 and general uncertainty in the energy market, which has led to decreased customer demand and an increase in idle aircraft.
Despite significant efforts to reduce costs, these factors, coupled with CHC’s debt and aircraft lease obligations, resulted in the company’s decision to engage advisors to assist in evaluating strategic alternatives to improve its capital structure, the company said.
Karl Fessenden, President and Chief Executive Officer, said: “The step we have taken today provides an orderly path to enhance our financial flexibility and establish a competitive capital and operating structure that will allow us to invest in and grow CHC’s business over the long-term.”