CHC Helicopter plans to raise up to $400m in flotation

CHC Helicopter, the operator of the Super Puma helicopter that crashed killing four North Sea oil workers in August, plans to raise up to $400m in a flotation of shares.

The pricing and scale of equity placing has not been determined, though owner First Reserve Corp confirmed it would not be selling down any shares.

Private equity group First Reserve acquired the helicopter business for an enterprise value of C$3.7bn in 2008.

Vancouver-based CHC operates a fleet of more than 240 aircraft in 30 countries and employs 4,400 employees in 60 bases across the world.

Though CHC is present in nearly all significant offshore oil and gas provinces, nearly half of its annual revenue of over $1.7bn is generated in the UK, Norwegian and Dutch sections of the North Sea.

Major clients include ExxonMobil, BP, Royal Dutch Shell, Statoil of Norway and Total, the French oil group whose contracted workers died in last month's crash.

CHC's main competitor in the North Sea is Bristow Group, the US-listed operator of 550 aircraft whose strong share price performance has led to its market capitalisation rising by 40 per cent to $2.4bn over the past year.

Bristow derives 40 per cent of its turnover from the UK, Norwegian and Dutch sections of the North Sea. It recently reported a 12 per cent rise in full-year operating revenue to $1.3bn in the year to March as it more than doubled net income from $65m to $132m while financing $1.2bn of net debt.

But CHC reported a net loss of $116m on annual revenue of $1.7bn in its year to April as interest payments of $127m on net debt of $1.4bn more than absorbed operating profits. Net losses continued into first-quarter results published this month.

The Canadian company said that the proceeds of the flotation would be used to repay debt and for general corporate purposes. JPMorgan, Barclays Capital and UBS are acting as the joint book-running managers for the offering.

CHC operates a range of helicopters manufactured by Sikorsky, Eurocopter, Textron and AgustaWestland.

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But more than a third of its fleet of heavier-load aircraft is the Eurocopter Super Puma series commonly used offshore that has attracted mounting concerns following a series of failures in the North Sea.

The crash in August was the Super Puma's fifth incident in the UK since 2009 and led to a temporary suspension of all UK flights by the helicopter series.

The Civil Aviation Authority lifted the suspension on August 30 after a week's review, stating it did "not believe that the accident was caused by an airworthiness or technical problem."

The end of the ban came a day after a UK safety steering group comprising oil companies, helicopter operators, trade unions and regulators, backed the return to active service of all variants of the Super Puma fleet, arguing that one model under question, the EC225, was "arguably the most examined helicopter in modern history".

However, the cross-industry body also said: "A sympathetic approach will be taken to any worker who, during this period, feels unable to fly."

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