Item 8.01. Other Events.
On April 15, 2019, Bristow Group Inc. (the Company, we, us or our) announced an update on
the timing of filing of its Quarterly Report on Form
10-Q
for the quarter ended December 31, 2018. The Company continues to work towards filing its Quarterly Report on Form
10-Q
for the quarter ended December 31, 2018 as soon as possible.
We are exploring strategic
alternatives to strengthen our balance sheet and to preserve and maximize the value of the Company while remaining committed to providing safe, reliable service to our customers. We had aggregate cash on hand and availability under our asset backed
revolving credit facility (ABL Facility), as of April 12, 2019, of $202.1 million.
We have engaged financial and
legal advisors, including Alvarez & Marsal, Houlihan Lokey, Baker Botts L.L.P. and Wachtell, Lipton, Rosen & Katz, to assist us in, among other things, analyzing various strategic alternatives to address our liquidity and capital
structure, including strategic financial alternatives to restructure our indebtedness. As part of this process and notwithstanding our ability to fund our payment, we have elected not to make the $12.5 million interest payment on our 6.25%
Senior Notes due 2022 (the Senior Notes) due on April 15, 2019 and to exercise our contractual right to enter into a
30-day
grace period under the relevant indenture (the Senior Notes
Grace Period). No assurance can be given as to the outcome or timing of this process.
Waiver of Defaults
On April 15, 2019, the Company entered into waiver letters (the Waiver Letters) with its secured equipment financing lenders
and ABL Facility lenders waiving certain events of default under such agreements as described below until June 19, 2019, subject to the delivery of the December 31, 2018 financial statements by such date and certain other conditions.
However, if the Company has not made the April 15, 2019 interest payment on the Senior Notes by May 15, 2019, each waiver will expire on such date if the Company has not secured a customary forbearance agreement with the requisite holders
of each of (i) the Companys 8.75% Senior Secured Notes due 2023 (the Secured Notes), (ii) the Senior Notes and (iii) the 4.50% Convertible Senior Notes due 2023 (the Convertible Notes) whereby the requisite
number of holders in each case agree to forbear from exercising all remedies with respect to any events of default arising out of the failure to make the April 15, 2019 interest payment due on the Senior Notes on or before the expiration of the
Senior Notes Grace Period.
The Waiver Letters include waivers of cross-defaults under such secured equipment financings and the ABL
Facility arising from the decision to enter the Senior Notes Grace Period. Although such payment is subject to the Senior Notes Grace Period, the failure to make such payment when due is an event of default under certain of the secured equipment
financings and the ABL Facility. The Waiver Letters also provide waivers from any defaults or events of default with respect to the delivery of unaudited quarterly financial statements for the period ended December 31, 2018.
Risk Factor Update
The following risk
factors are provided to supplement the risk factors of the Company previously disclosed under the headings Risks Relating to Our Business and Risks Relating to Our Level of Indebtedness in the Annual Report on Form
10-K
for the fiscal year ended March 31, 2018 (the 2018 Form
10-K)
and the Quarterly Report on Form
10-Q
for the
quarter ended September 30, 2018. Capitalized terms not otherwise defined herein have the meanings ascribed to them in the 2018 Form
10-K.
We may not be successful in complying with the covenants contained in our debt instruments and lease agreements, and any such failure to
comply could result in defaults under such commitments. If we are unable to obtain waivers of any such defaults, we could be required to repay our debt obligations or contractual commitments earlier than anticipated, and there is no assurance that
we would have sufficient cash available to fund such payments.
Certain of our credit facilities which are secured by pledges of
aircraft with aggregate outstanding borrowings of $391.2 million at December 31, 2018, and certain of our aircraft leasing arrangements to which we are the lessee, contain covenants of a
non-financial
nature related to pledged aircraft, and our failure to comply with these covenants could result in events of default under our financing agreements, unless waived. Each aircraft collateral pledge
specifically identifies the airframes and engines of the aircraft pledged to its credit facility. Similarly, each aircraft lease specifically identifies the airframes and engines covered by the lease. The agreements contain a requirement to
maintain certain collateralized engines on specific collateralized aircraft with limited exceptions for, among other things, the repair and maintenance of the aircraft engines. From time to time, engines are removed and replaced on an airframe.
In some cases, these actions are subject to certain other limited exceptions permitted under the credit and lease agreements, so long as (a) a pledged or leased engine is replaced with another engine subject to the same transaction or, in some
cases, any other engine, so long as such other engine is free and clear of liens other than certain permitted liens and (b) in the case of a loaner engine furnished by a maintenance provider temporarily replacing a pledged or leased
engine,
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