PHI Provides Update on Its Refinancing and Strategic Plans

PHI Provides Update on Its Refinancing and Strategic Plans 2 Oct, 18, Source: PHI

PHI, Inc. (The Nasdaq Select Global Market: PHII (voting); PHIIK (non-voting)) announced today several steps related to its long-term financial and strategic positioning, including the refinancing of its senior secured revolving credit facility and a review of the Company’s potential strategic alternatives.
Refinancing of Secured Debt
On September 28, 2018, the Company borrowed $130 million from the financing affiliate of Al A. Gonsoulin, the Company’s Chairman, CEO and controlling shareholder. The loan bears interest at a rate of 6% per year, and matures on September 28, 2020. The proceeds of this loan were used to repay and terminate the Company’s senior secured revolving credit facility (the “Terminated Facility”) and to cash collateralize letters of credit that will remain outstanding.
The loan from Mr. Gonsoulin’s affiliate is guaranteed by two of the Company’s principal subsidiaries. The obligations of the Company and the two guarantors are secured by their domestic inventory, spare parts and accounts receivable. These guaranties and collateral match the guaranties and collateral that previously secured the Terminated Facility. Unlike the Terminated Facility, the loan from Mr. Gonsoulin’s affiliate includes no financial covenants.
In connection with unanimously approving the new loan, the Company’s independent directors received an opinion issued by a nationally-recognized financial advisory firm that the loan is fair to the Company from a financial point of view.
Retainment of Financial Advisor
The Company also announced its engagement of Houlihan Lokey as its financial advisor to assist the Company in exploring and evaluating a broad range of potential strategic alternatives to improve the Company’s liquidity and enhance shareholder value. At this time, the Company’s Board has not set a timetable for the completion of this process, nor has it made any decisions related to specific strategic alternatives. There is no assurance that this process will result in any particular outcome. The Company does not intend to provide any updates on its process unless or until it determines that further disclosure is necessary or appropriate.
Retention Arrangements
The Company further announced the adoption of new retention plans providing potential benefits in the event of certain change of control transactions. These arrangements are designed to ensure continuity of its business and senior leadership teams through the completion of the strategic alternatives review and any potential outcome of that process.

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