In Helitech 2016: Shaking Up the Offshore Helicopter Business I commented that:
“some lessors are definitely not welcoming the recently announced Milestone (part of GE) relationship with CHC…have no doubt that the position is pretty dire for those lessors focused on heavy aircraft in the offshore oil and gas market and those with CHC exposure – so expect some adjustments in the structure of the leasing business”.
That was an understatement. On 14th October Waypoint lodged an Objection to CHC’s court application to expedite the Milestone agreement as part of their Plan Support Agreement to exit Chapter 11. The tone of the Objection is vitriolic coming from a spurned potential suitor to become lead lessor to CHC. Waypoint make the case in their Objection that they stand to lose significantly if Milestone do get into bed with CHC.
The date set for an expedited hearing is currently November 2nd with any Objections having to be filed by October 26th. CHC filed the Motion for the Plan Support including the Milestone Agreement on October 11th. The agreement between CHC and Milestone is conditional on court approval by November 11th.
The Waypoint Objection informs us that Waypoint was the other negotiating party with CHC:
“As one of the Debtors’ largest lessors and creditors, Waypoint engaged in good faith negotiations with the Debtors regarding a potential restructuring of the Waypoint Lease Agreements. In the Plan Support Motion, the Debtors state that they engaged in “parallel negotiations” with “two of their largest lessors”—Waypoint and Milestone…regarding a potential lease restructuring transaction …However, the Debtors abruptly stopped negotiations with Waypoint and, despite Waypoint’s request to continue negotiations, elected to negotiate a transaction exclusively with Milestone. (Case 16-31854-bjh11 Doc 969 Filed 14/10/16)
Waypoint is a significant creditor of CHC with a large exposure on aircraft. Twelve of their aircraft have already been returned with another three pending. According to this latest Objection, Waypoint’s exposure totals a further 29 helicopters and could amount to over $300 million:
“Waypoint is the holder of claims against the Debtors in the aggregate total amount of not less than $90,452,755.14, consisting of lease rejection damages claims in the amount of not less than $64,432,523.84, unpaid lease rental claims in the amount of not less than $17,263,092.30… and other costs, fees, expenses, losses, liabilities and other damages as a result of breaches by the Debtors of the Waypoint Lease Agreements in the amount of not less than $8,757,139.00. Waypoint’s claims against the Debtors stand to increase significantly (by an amount potentially well in excess of $300 million) to the extent the Debtors reject additional Waypoint lease contracts.”
Waypoint’s claim is that they will be significantly prejudiced by the shortened notice period and are clearly aggrieved that they were not included in the negotiation of the Support Agreements, even going so far as to complain that the Motion to expedite the hearing was filed on 12th October, the day of Yom Kippur when their New York counsel was not available.
Copyright and full responsibility for the content of this article remains with Allan Blake, an independent Aviation Consultant. He was Regional Director (Asia Pacific) with the Bristow Group for seven years. He is also the author of “Dynamic Directors: Aligning Board Structure for Business Success” (Macmillan).
- Jhonlin Air Transport to add Airbus H145
- Cooper 2 joins life-saving Air Medical Transport Service
- DHART expands its reach
- Bell 525 completes hot weather testing
- Hampshire and Isle of Wight Air Ambulance fly 8,000th Mission
- Bell Announces the Delivery of Bell 429s to Jamaica Defence Force
- Egypt Receives new Ka-52 Alligator Helicopters
- Nepal to clamp down on helicopter rescue insurance scams
- Sonoma County Sheriff unveils new helicopter
- Wales Air Ambulance takes over Cardiff HP lease
- Japan resumes talks with local government on V-22 deployment
- Babcock takes delivery of another new S92
- AVIC AC312E Passes Stability Test
- LOTN completes overhaul of first Afghan Mi-17V-5
- Bell Boeing Joint Program awarded $74M contract for V-22 Repairs
- Bergen H225 Final Accident Report : Comprehensive and Worrying
- New Zealand orders NH90 flight training device from CAE
- Maverick Helicopters has expanded operations to Hawaii’s Kauai
- CHC and Sikorsky Sending Students to Safety & Quality Summit
- Aerometals Receives FAA STC Approval for Airbus H130 IBF System