Macquarie buying offshore heli leasing firm Waypoint for $650M

Waypoint Leasing Holding, one of the world’s largest helicopter leasing companies which recently filed for bankruptcy protection, is set to be acquired Macquarie Group.

Illustration: Offshore helicopter/ Image by: Ausjun22/Wikimedia, Shared under CC 4.0 license
Illustration: Offshore helicopter/ Image by: Ausjun22/Wikimedia, Shared under CC BY-SA 4.0 license

According to agreements signed last week, Macquarie will buy the offshore helicopter leasing specialist for $650 million.

Macquarie Rotorcraft Leasing will combine the Waypoint helicopter assets and management platform with its own portfolio and employ the Waypoint staff.

“This is a momentous step forward in achieving our goal to transform Waypoint,” said Hooman Yazhari, Chief Executive Officer of Waypoint. “With Macquarie’s strong balance sheet and incredible depth in aviation, the integrated platform will be the most dynamic in the industry. The expertise of our combined resources and human capital will give us an unparalleled foundation to bring stability and a long-term balance to a sector filled with uncertainty.

“We remain incredibly grateful for the support of our stakeholders throughout our transformation process, including our lenders, customers, OEMs and MROs and, above all, our employees who have worked tirelessly. We anticipate a speedy conclusion of the sale process, after which we and Macquarie will reach new heights, poised to capture the many opportunities ahead of us.”

“We anticipate a speedy conclusion of the sale process, after which we and Macquarie will reach new heights, poised to capture the many opportunities ahead of us.”

Waypoint, which owns 165 helicopters built by major players such as Sikorsky, Bell, Airbus, and Leonardo, last week said it had received commitments from a consortium of several of its existing lenders for $45 million of debtor-in-possession (“DIP”) financing, to facilitate the sale of the company to Macquarie.

“The DIP financing will provide Waypoint with ample liquidity to continue operating in the ordinary course during its Chapter 11 bankruptcy case,” Waypoint said.

Waypoint on November 25, 2018, filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York to allow for breathing space to explore restructuring options as it was unable to pay its debts “as they fall due.”

While Waypoint leases helicopters to operators in various industries such as emergency medical services (EMS), government and humanitarian services, utility and firefighting, search and rescue (SAR) and wind farm support, according to court documents majority of Waypoint’s lessees are helicopter service providers servicing the offshore oil and gas industry.

This ties the company to the state of the offshore oil and gas industry which has been hit hard by the oil and gas downturn which started in 2014.

Oil industry downturns spills over to helicopters

 

In a court declaration related to the Bankruptcy protection, Todd Wolynski, Waypoint’s General Counsel and Chief Administrative Officer said: “The cyclical downturn in the oil and gas industry beginning in 2014 led to a significant decline in offshore oil exploration, cost reduction measures for production operations, and a substantially decreased demand for offshore drilling services by upstream, exploration and production companies (“E&P Companies”).

“Although the price of crude oil had slowly begun to rebound, the effects of this protracted downturn are still evident. The severe reductions in capital spending and cost-cutting measures implemented by the offshore oil and gas industry during the downturn have resulted, in turn, in decreased demand for helicopter services from the [ Waypoint’s ] primary customer base, the oil and gas helicopter operators ( [ Waypoint’s ] lessees).

“Cost-cutting measures implemented by the offshore oil and gas industry during the downturn have resulted, in turn, in decreased demand for helicopter services.”

“Due to this negative impact on the helicopter service industry, helicopter operators have employed their own cost-cutting measures, including reducing their fleet size, engaging in fewer lease extensions or renewals, demanding rental reductions, and, in some cases, filing for reorganization under the Bankruptcy Code. The Debtors’ single largest customer, CHC Group Ltd., and certain of its affiliates (collectively, “CHC”) filed for chapter 11 relief in May 2016.

“As a result of CHC’s filing, by May 2018, the [Waypoint] experienced an annualized $45 million reduction in revenues associated with the forty-four (44) aircraft leased to CHC on account of CHC’s rejection or renegotiation of the leases for such aircraft. Further, to date, the [Waypoint] have incurred approximately $28.4 million in unexpected transition and maintenance costs on account of the rejected CHC aircraft.”

Wolynski further said that the oil and gas industry downturn has created an oversupply of available helicopters in the market, which has significantly impacted the Waypoint’s utilization and yields.

He said” [Waypoint’s] revenue declined 12% in 2017 as compared to 2016 and the weighted average remaining lease term was reduced to 2.2 years for the year ended December 31, 2017, down from 3.1 years at the end of 2016″

He said that as of the Bankruptcy protection petition that, Waypoint’s total fleet utilization was approximately 78%, down from utilization rates of approximately 94% to 100% during 2013 to late 2015.

Macquarie’s acquisition of Waypoint is expected to close in the first quarter of 2019, subject to, among others, Bankruptcy Court and regulatory approval. Waypoint will continue to operate in the ordinary course of business until financial close.

Offshore Energy Today Staff

Share this article

Follow Offshore Energy Today

Events>

<< May 2019 >>
MTWTFSS
29 30 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31 1 2

08th OIL & GAS AFRICA 2019 CONFERENCE

OIL & GAS AFRICA is one of the most prime regional & international Oil and Gas conferences in East Africa…

read more >

FPSO Brazil Congress 2019

Charging ahead with 24 planned orders by 2022, Brazil has once again solidified its status as one of the world’s foremost oil and gas leaders…

read more >

OWI WA 2019

West Africa’s only dedicated Offshore Well Intervention Conference is returning for its second year…

read more >

OIL & GAS PHILIPPINES 2019

Oil & Gas Philippines event display products like Oil & gas, fire protection systems and materials…

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply