VLM Airlines files for 6 month creditor protection

Belgium-based VLM Airlines filed for bankruptcy protection in an Antwerp commercial court.

The move, if approved, would grant the airline operator creditor protection for a period of six months, enabling it to restructure operations.

According to VLM’s CEO Hamish Davidson,  the company expected that the judicial reorganization would enable it to repay historical debts and suppliers and ensure the smooth running of daily operations.

KBC Bank’s decision to freeze VLM’s accounts on Wednesday last week triggered the filing, equivalent to Chapter 11 in the United States.

The airline’s debts reportedly included €3m ($3.4m) owed to the bank as well as an additional €3m owed to various suppliers which include the Antwerp Airport.

The operator had suffered a €13m ($14.7m) loss for its last financial year making it abandon plans to lease four SSJ 100-95 LRs from Russian lessor, the Ilyushin Finance Co., earlier this year.

At present, VLM operates eleven Fokker 50s (of which two are leased to each of Cityjet and flybe) on passenger charter flights as well as scheduled passenger flights between Belgium, Switzerland, Germany, the United Kingdom, Ireland, the Netherlands, Italy, and Norway.

Source:  Ch-aviation

SunEdison’s yieldcos given more time to file delayed reports

SunEdison Inc.’s yieldco’s TerraForm Power Inc. and TerraForm Global arranged for more time to file their financial reports for 2015, thus helping them avoid a potential technical default on their credit facilities. The agreement was approved by lenders on Tuesday.

TerraForm Power Inc. has until 28 May 2016, to file its annual financial results whereas TerraForm Global Inc. could get an extension period of almost 10 months, in exchange for reducing the size of its own revolving credit line to $350m from $485m.

As per an SEC-filing, TerraForm Power would also delay the release of its 1Q’16 report as it had identified “material weaknesses in internal controls over financial reporting,” including the valuation of costs of projects acquired from SunEdison and processing accounts payable and general and administrative expenses.

The yieldcos delayed releasing their annual reports partly due to the assistance needed from their bankrupt parent SunEdison, which also hasn’t filed its reports. Parent company SunEdison had sought bankruptcy protection in April 2016.

TerraForm Global did not provide a specific new deadline in the filing but it had until either 30 March 2017, or 10 business days before “failure to deliver such financial statements would constitute an event of default” for another debt, its senior notes due 2022, whichever came first.

Source: Bloomberg

Property developer Kaisa Group files for Ch-15 restructuring

Kaisa Group Holdings Ltd., a Shenzhen, China-based property developer filed a Chapter 15 petition (Case: 16-11303) in the Manhattan court on 5 May 2016. The company used this provision of U.S. bankruptcy law to deal with U.S. creditors or lawsuits when reorganizing in a Hong Kong court.

Kasia had $14.9bn in debt, backed by $16.1bn of assets.

Kaisa stated that holders of 96% of its offshore debt, supported the company’s restructuring agreement negotiated in the Hong Kong.

The company anticipates that the Hong Kong court will approve its restructuring plan.

Further, the company plans to meet with creditors on 20 May 2016.

Source: Bloomberg

CHC Group files for Chapter 11 bankruptcy

U.S-based CHC Group Ltd., which is engaged in the provision of transportation services to the offshore oil and gas industry, filed for Chapter-11 bankruptcy. The filing came days after a fatal accident of one of its helicopters in Norway, which forced the company to ground much of its fleet.

As of 31 January 2016, the company had debt of $2.19bn against assets of $2.17bn and operated a fleet of 231 helicopters as on 31 January 2016. Industry experts estimated that one-fifth of the company’s fleet was idle, due to lack of demand for its services from oil & gas companies, forcing it to explore cost-cutting options.

Further, on 15 April 2016, the company missed a $46m interest payment on approximately $1bn of its bonds, triggering a 30-day grace period to make the payment and avoid default.

Weil Gotshal & Manges and Debevoise & Plimpton are the legal representatives of the company.

Financial advisers to CHC are Seabury Advisors, PJT Partners and CDG Group.

Source: WSJ

High-end supermarket chain operator Fairway files for bankruptcy

U.S-based high-end supermarket chain Fairway Group filed for a “pre-pack” bankruptcy and reached an agreement with creditors to cut $140m in debt.

The chain, which primarily operates its stores in New York, reached an agreement with 70% of its senior secured creditors to convert $140m of c.$279m of debt into equity.

The “pre-pack” chapter 11 filing is an agreement and restructuring plan with a majority of creditors that has already been reached.

The secured lenders have also provided $55m in a superpriority secured debtor-in-possession (DIP) credit facility and a $30.6m letter of credit to cover operating financing.

The proposed DIP financing would support Fairway’s reorganization plans and enable normal post-petition operation of its business, including timely payment of employee wages, benefits and other obligations.

Source:  Undercurrent News

Hanjin Shipping to begin creditor-led debt restructuring

South Korea-based Hanjin Shipping reached an agreement with creditors who have agreed to offer financial assistance to the company and initiate a corporate restructuring program.

Creditor banks, led by state-run Korea Development Bank, approved Hanjin’s debt restructuring proposal at a meeting on Wednesday.

The conditions for the bailout include reduced charter rates that Hanjin pays out to foreign shipowners, retaining a global alliance membership and signing a debt restructuring agreement with bondholders.

The agreement comes days after Hanjing Shipping submitted a revised self-rescue measure to creditors on 2 May 2016.

The creditors plan to give a three-month maturity extension of principal and interest starting and roll out debt refinancing measures by hiring accounting firms.

The company plans to finalize negotiations with 22 shipowners by the end of May 2016. Further, it also plans to hold a meeting with bondholders on 19 May 2016 to extend the maturity date on KRW 35.8bn won of its bonds by four months.

Source: The Korea Herald

Seadrill reaches agreement with its banking group

Seadrill Ltd., a provider of drilling services to E&P companies, reached an agreement with its banking group on restructuring its debt amid adverse market conditions.As part of the first phase of a broader restructuring plan, the company extended the maturities of the following credit facilities:

  1. The $450m credit facility originally maturing in June 2016; now extended until December 2016
  2. The $400m credit facility originally maturing in December 2016; extended until May 2017
  3. The $2bn NADL credit facility originally maturing in April 2017; extended until June 2017

Further, the company amended the following covenants, extending them to 30 June 2017:

  1. Reset its leverage ratios on its senior secured credit facilities to 6.5x between 1 January 2017 and 30 June 2017
  2. Adjusted the total equity to total assets ratio by excluding the effects of market values of its drilling units, whilst maintaining a minimum ratio of 30% for the stated period
  3. Suspended clauses on its credit facilities which required Seadrill to post additional collateral or prepay a portion of the outstanding borrowings based on a minimum value of its drilling units
  4. Increased its minimum liquidity requirement from $150m to $250m

Further, the company agreed to refrain from borrowing any undrawn commitments under its senior secured credit facilities.

The company aims to restructure its debt by the end of FY 2016.

Source: Company Press Release





Ultra Petroleum files for bankruptcy

Ultra Petroleum Corp., an oil and gas explorer, filed for bankruptcy with $1.3bn of assets and $3.9bn of debt on a prolonged downturn in oil prices.

The company has requested, in courts, to permit it to continue with its surety bonding programme ($12.6m outstanding), which secures its obligations on plugging of wells, environmental damage and road damage.

Previously,  the company missed certain interest payments on its debt. Further, Sempra Rockies Marketing LLC, a pipeline operator sued Ultra for failure to pay it transport fees.

Source:  Bloomberg



Pacific Exploration restructuring receives support from creditors; extends deadline for further acceptances

Canada-based oil and gas explorer Pacific Exploration & Production Corp., announced that its Restructuring Plan was supported by bondholders holding c. 67.8% of the company’s debt.

Previously, on 27 April 2016, the company and certain of is subsidiaries had obtained an Initial Order from the Superior Court of Justice in Ontario under the Companies Creditors Arrangement Act.

Bondholders, who supported the restructuring plan by 29 April 2016, would receive a 2.2% stake in the reorganized company’s equity.

Further, the company has extended the restructuring deadline until 6 May 2016.

Source: PRNewswire


Abengoa wins US Bankruptcy Court protection

Spanish renewable energy firm Abengoa S.A. was granted bankruptcy protection from creditors amid objections from a group of insurance companies who claimed that the company’s debt restructuring talks was unfair to U.S. creditors.

Previously, Abengoa had entered into a pre-insolvency standstill agreement with key creditors that gave the company time until 28 October 2016 to continue negotiations on restructuring its debt, which as per court papers, totals more than €14.6bn ($16.48bn).

However, a group of insurance companies, including Liberty Mutual Insurance Co., AIG and Zurich American Insurance Co., which had issued $250m in surety bonds tied to Abengoa’s construction of U.S. power plants, called the Spanish proceeding “manifestly contrary” to U.S. public policy because it forced them to abide by a standstill agreement without due process.

The insurance firms were arguing that the Spanish restructuring proceedings should only be recognized if they were identical to a U.S. bankruptcy proceeding.

With the approval from the U.S. Bankruptcy Court, Abengoa would receive all the benefits of U.S. bankruptcy law, including the so-called automatic stay that halts lawsuits and prevents creditors from seizing assets.

Source: WSJ