The parent company of Richmond, B.C.-based CHC Helicopters has filed for Chapter 11 bankruptcy protection in Texas, saying it has been a victim of the dramatic slump in oil prices.
CHC Group said Thursday that weakness in oil prices and uncertainty in the energy market has "led to decreased customer demand and an increase in idle aircraft."
CHC Group said reorganization under bankruptcy protection is expected to help it strengthen its financial position by reducing long-term debt and allowing it to operate its fleet of aircraft.
"The step we have taken today provides an orderly path to enhance our financial flexibility and establish a competitive
capital and operating structure that will allow us to invest in and grow CHC's business over the long-term," said president and CEO Karl Fessenden.
"We remain committed to maintaining our position as a world class helicopter service provider," he said.
On April 16, CHC Group and one of its subsidiaries, CHC Helicopter S.A., said it wouldn't make a $46-million US interest payment due that day to its debtholders. The company said then it would use a 30-day grace period to examine its option for reworking its debt.
The filing also follows the grounding of much of CHC's helicopter fleet following a deadly crash of one of its aircraft in Norway on April 20, which killed two pilots and 11 oil workers returning to the Norwegian mainland.