CD&R Completes First Stage of CHC Investment

CD&R Completes First Stage of CHC Investment

31-Oct-2014 Source: CHC

Clayton, Dubilier & Rice (CD&R) has completed the first stage of CD&R’s investment in CHC Group Ltd. (NYSE: HELI) through the purchase of 116,000 convertible preferred shares in a private placement for a price of $116 million, consistent with terms of an investment agreement that CHC and CD&R entered into on Aug. 21.

CD&R is investing an additional $384 million, subject to approval by the CHC shareholders at an extraordinary general meeting, to be held on Nov. 7, and satisfaction of other closing conditions.

Finally, CHC is providing existing shareholders with rights to purchase up to a combined $100 million of additional preferred shares. For the rights offering to existing shareholders to be completed, those shareholders must purchase a minimum combined $50 million of preferred shares. CD&R has agreed to purchase the full $100 million of additional preferred shares if the $50 million threshold in the offering to existing shareholders is not reached. As a result, CD&R’s total investment in CHC could be up to $600 million.

CHC estimates that the net proceeds from the private placement, together with the rights offering and after deducting estimated expenses, will be approximately $572.4 million. CHC plans to use proceeds from the investment primarily to reduce debt and other fixed charges. A portion of the proceeds is expected to be used to redeem $105 million of senior unsecured notes and $130 million of senior secured notes, plus associated premiums.

As part of the transaction and concurrent with today’s convertible share purchase, CD&R partners John Krenicki Jr. and Nathan K. Sleeper have joined the CHC board of directors. Mr. Krenicki has assumed the role of chairman. William E. Macaulay has resigned from the board effective today

About CHC Group Ltd.

CHC Group Ltd. is a commercial operator of helicopters focused on enabling customers to go further, do more and come home safely. CHC provides helicopter flight services to oil and gas companies and government search-and-rescue agencies, and helicopter maintenance, repair and overhaul services to organizations through the Heli-One segment. The company operates 233 aircraft in about 30 countries around the world.

About Clayton, Dubilier & Rice

Founded in 1978, Clayton, Dubilier & Rice is a private equity firm with an investment strategy predicated on producing financial returns through building stronger, more profitable businesses. CD&R manages approximately $21 billion on behalf of its investors and since inception has acquired 62 businesses with an aggregate transaction value of more than $90 billion. For more information, please visit www.cdr-inc.com.

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