- It will have zero impact on Nigerian operations, says company
The operations of Bristow Helicopters (Nigeria) Limited may be threatened as its parent company, Bristow Group Inc. in the United States faces the option of bankruptcy if it fails to meet its financial obligation under a given period.
However, Bristow Nigeria Limited has clarified that the issues concerning its parent company in the US would have zero impact on its operations in Nigeria.
Reports from the United States Security and Exchange Commission (NASDAQ) SEC filing indicated that Bristow has exercised its right to a 30-day grace period to make a $12.5 million interest payment and the company has until May 15, 2019 to make this payment or declare for Chapter 11, which is bankruptcy.
Aviation industry analysts in Nigeria have stated that this may affect the company’s business in the country, as oil and gas operators may not be willing to extend contracts to the aviation logistics company, which has been operating in Nigeria for decades.
THISDAY gathered that the oil and gas exploration and production companies are known to be averse to extending contracts to organisations under financial distress.
Until recently Bristow held over 60 per cent of the market share in the oil and gas logistics.
It was gathered that though the operations of some indigenous companies have eroded the company’s market share, the company still has substantial contracts that are yet to expire.
Bristow Group Inc. in a letter to SEC said, “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.”
Hinting on possible bankruptcy, the company further said, “We have engaged financial and legal advisors to assist us in, among other things, analysing various strategic financial alternatives to address our liquidity and capital structure, including strategic financial alternatives to restructure our indebtedness. We and certain of our subsidiaries may elect to implement such a transaction through Chapter 11 of the United States Bankruptcy Code (“Chapter 11”) in order to obtain court approval of such transactions and to facilitate the stakeholder approvals necessary to implement such transactions.”
But in a swift reaction, the Bristow Senior Business Development Manager, Mayowa Babatunde, told THISDAY that the issues concerning Bristow parent company in the US would have zero impact in the operations of Bristow (Nigeria) Limited.
“It will not affect our operations here. Measures have been put in place to address those issues. From the operational standpoint we are operating normally,” Babatunde said.
But industry insiders are of the view that Bristow may not be able to secure more contracts if its parent company is declared bankrupt.
“When Canada Helicopter Company (CHC) left Nigeria by severing its partnership with Aero Contractors, its activities in the country diminished, even when it partnered another company to form Atlantic Aviation. When it declared Chapter 11, its business closed in Nigeria. So my thinking is that Bristow will wrap up its operations under force majeure and they won’t go into a new contract,” one of the sources told THISDAY.
THISDAY’s investigations also revealed that Bristow had directed its suppliers to send their invoices to KPMG, the global audit company.
Source: THISDAY
