Item 1.01. Entry into a Material Definitive Agreement.
As previously disclosed, on May 11, 2019, Bristow Group Inc. (the “Company”, “Bristow Group”, “we”, “us” or “our”) and its subsidiaries BHNA Holdings Inc., Bristow Alaska Inc., Bristow Helicopters Inc., Bristow U.S. Leasing LLC, Bristow U.S. LLC (“Bristow U.S.”), BriLog Leasing Ltd. (“Brilog”) and Bristow Equipment Leasing Ltd. (together with the Company, the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”) seeking relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). The Debtors’ Chapter 11 Cases are jointly administered under the caption In re: Bristow Group Inc., et al., Main Case No. 19-32713. The Debtors continue to operate their businesses and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
Omnibus Agreement
On October 3, 2019, the Company entered into an Omnibus Agreement (the “Omnibus Agreement”) among Bristow Equipment Leasing Ltd., a subsidiary of the Company (the “Borrower”), PK Transportation Finance Ireland Limited, as lender (the “Lender”), PK AirFinance S.à r.l., as agent (in such capacity, the “Agent”) for the Lender, and PK AirFinance S.à r.l., as security trustee (in such capacity, the “Security Trustee”) for the MAG Agent and the MAG Parties (each as defined in the Credit Agreement (as defined herein)), the Agent and the Lender. Pursuant to the Omnibus Agreement, among other matters, the parties have agreed, effective upon satisfaction of the conditions precedent set forth in the Omnibus Agreement (the “Agreement Effective Date”), to amend that certain Credit Agreement, dated as of July 17, 2017, by and among the Borrower, the Agent, the Security Trustee and the Lender (as amended to date, the “Credit Agreement”), to, among other things, extend the maturity date of the 24 loans made under the Credit Agreement (the “Loans”) by 18 months to January 27, 2025 and increase the principal amount of the Loans in an aggregate amount of approximately $17.3 million. The Omnibus Agreement also updates the amortization schedule as of October 3, 2019 to provide that, among other things, only interest will be payable on the Loans for the six months following the Agreement Effective Date, with a balloon amount of approximately $104,201,048 due on the maturity date. If the Loans are refinanced by full prepayment during the six-month period following the Effective Date (as defined herein), no prepayment penalty will be due. Each Loan is secured by an aircraft which has been pledged as collateral for the Loans.
The Omnibus Agreement also provides that the Borrower Guarantee and Indemnity Cap (as defined in the Credit Agreement) will be reduced by the amount of increased principal when paid. In addition, the Omnibus Agreement adjusts the information covenants under the Credit Agreement such that the Company shall provide a copy of the annual audit report for each fiscal year for the Company and its subsidiaries as soon as available and in any event within 90 days after the end of such fiscal year of the Company (or, in the case of the fiscal year ended March 31, 2019, by October 31, 2019), and quarterly financial statements of the Company and its subsidiaries within 45 days after the end of each fiscal quarter of the Company (and, in the case of each of the fiscal quarters ended June 30, 2019 and September 30, 2019, by December 31, 2019). In the Omnibus Agreement, the Lender also agreed to waive certain events of default arising from breaches of covenants in other agreements as a result of the Chapter 11 Cases and failure to provide its financial statements by their required due dates.
The foregoing description of the Omnibus Agreement does not purport to be complete and is qualified in its entirety by reference to the Omnibus Agreement, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 1.03. Bankruptcy or Receivership.
As previously disclosed, on August 1, 2019, the Debtors filed a joint chapter 11 plan of reorganization and a related disclosure statement with the Bankruptcy Court in accordance with the Bankruptcy Code, and on August 20, 2019, the Debtors filed an Amended Joint Plan of Reorganization (as subsequently modified on August 22, 2019 and September 30, 2019, the “Plan”) and the related disclosure statement for the Plan (as subsequently modified on August 22, 2019, the “Disclosure Statement”) with the Bankruptcy Court. On August 26, 2019, the Bankruptcy Court entered an order conditionally approving the Disclosure Statement and approving the Debtors’ commencement of solicitation of votes on the Plan. On October 8, 2019, the Bankruptcy Court entered an order (the “Confirmation Order”) approving the Disclosure Statement and confirming the Plan. The Plan is attached as Exhibit A to the Confirmation Order, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The Debtors expect that the effective date of the Plan (the “Effective Date”) will occur as soon as all conditions precedent to the Plan have been satisfied. Although the Debtors are targeting occurrence of the Effective Date as soon as reasonably practicable, the Debtors can make no assurances as to when, or ultimately if, the Plan will become effective. It is also possible that technical amendments could be made to the Plan prior to the Effective Date.
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