DEBT |
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEBT | DEBT Debt as of March 31 consisted of the following (in thousands):
The Company’s scheduled long-term maturities as of March 31, 2021 (Successor) (which excludes unamortized discount of $21.6 million and unamortized deferred financing fees of $8.5 million) were as follows (in thousands):
Cash paid for interest expense during the fiscal year ended March 31, 2021, was $32.3 million.
6.875% Senior Notes — In February 2021, the Company issued $400.0 million aggregate principal amount of its 6.875% senior secured notes due March 2028 (the “6.875% Senior Notes”) and received net proceeds of $395.0 million. The 6.875% Senior Notes are fully and unconditionally guaranteed as to payment by a number of subsidiaries. Interest on the 6.875% Senior Notes is payable semi-annually in arrears on March 1st and September 1st of each year. The 6.875% Senior Notes may be redeemed at any time and from time to time, with sufficient notice and at the applicable redemption prices set forth in the indenture governing the 6.875% Senior Notes, inclusive of any accrued and unpaid interest leading up to the redemption date. The indenture governing the 6.875% Senior Notes contains covenants that restrict the Company’s ability to, among other things, incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem the Company’s capital stock, prepay, redeem or repurchase certain debt, make loans and investments, sell assets, incur liens, enter into transactions with affiliates, enter into agreements restricting its subsidiaries’ ability to pay dividends, and consolidate, merge or sell all or substantially all of its assets. In addition, upon a specified change of control trigger event or specified asset sale, the Company may be required to repurchase the outstanding balance of the 6.875% Senior Notes. As of March 31, 2021, the Company had $8.5 million of unamortized debt issuance costs associated with the 6.875% Senior Notes.
The net proceeds from the offering, together with cash on hand, were used to repay approximately $484.7 million in debt, with respect to the Company's secured equipment term loan with Macquarie Bank Limited (“Macquarie Debt”), and the Company’s term loans with PK AirFinance S.à r.l.(“PK Air Debt”) and to redeem the Company’s outstanding senior unsecured notes due December 15, 2022 (the “7.750% Senior Notes”). In connection with the above, the Company recognized a loss on extinguishment of debt of $28.5 million related to the write-off of discount balances and early repayment fees. The issuance of
the 6.875% Senior Notes and repayment of existing debt allows the Company to further strengthen its financial position by simplifying its capital structure, reducing mandatory amortization requirements, significantly reducing operational friction costs and extending the Company’s debt maturities.
PK Air Debt — On July 17, 2017, a subsidiariy of Old Bristow entered into the PK Air Debt credit agreement which provided for commitments in an aggregate amount of up to $230 million to make up to 24 term loans, each of which was made in respect of an aircraft pledged as collateral for all of the term loans. Each term loan bore interest at an interest rate equal to, at the borrower’s option, a floating rate of one-month LIBOR plus a margin of 5% per annum, subject to certain costs of funds adjustments, determined two business days before the borrowing date of each term loan, or a fixed rate based on a notional interest rate swap of 12 30-day months in respect of such term loan with a floating rate of interest based on one-month LIBOR, plus the Margin. During the fiscal year March 31, 2021 (Successor), the Company made principal and interest payments of $19.2 million and $10.7 million, respectively. In February 2021, the Company made a $200.7 million payment to extinguish the PK Air debt.
Macquarie Debt — On February 1, 2017, one of Old Bristow’s wholly-owned subsidiaries entered into the Macquarie
Credit Agreement for a $200 million five-year secured equipment term loan with Macquarie Bank Limited. Borrowings under the financing bore interest at an interest rate equal to the Intercontinental Exchange Benchmark Administration’s (“ICE Benchmark Administration”) Limited LIBOR, or its successor, plus 5.35% per annum. During the fiscal year March 31, 2021 (Successor), the Company made principal and interest payments of $7.2 million and $8.0 million, respectively. In February 2021, the Company made a $152.0 million payment to extinguish the Macquarie debt.
7.750% Senior Notes — On December 7, 2012, Era Group issued $200.0 million aggregate principal amount of its 7.750% senior unsecured notes due December 15, 2022 (the “7.750% Senior Notes”) and received net proceeds of $191.9 million. Interest on the 7.750% Senior Notes was payable semi-annually in arrears on June 15th and December 15th of each year. The payment obligations under the 7.750% Senior Notes were fully and unconditionally guaranteed by certain of the Company’s subsidiaries. The pre-Merger outstanding principal amount of Era’s 7.750% senior unsecured notes as of March 31, 2020 was $144.0 million. In June 2020, in connection with and upon completion of the Merger, Era’s long-term debt less its current maturities were fair valued and a value of $136.8 million was assigned to the 7.750% Senior Notes.
During the fiscal year March 31, 2021 (Successor), the Company fully redeemed $144.1 million of the 7.750% Senior Notes and made $7.6 million in interest payments.
Lombard Debt — On November 11, 2016, certain of Old Bristow’s subsidiaries entered into two, seven-year British
pound sterling funded secured equipment term loans for an aggregate $200 million U.S. dollar equivalent with Lombard North
Central Plc, a part of the Royal Bank of Scotland (the “Lombard Debt”). Borrowings under the financings bear interest at an interest rate equal to the ICE Benchmark Administration’s Limited LIBOR, or its successor, plus 2.25% per annum. The financing which funded in December 2016 matures in December 2023 and the financing which funded in January 2017 matures in January 2024. During the fiscal year March 31, 2021 (Successor), the Company made principal and interest payments of $12.8 million and $4.1 million, respectively.
Promissory Notes — In 2010, Era entered into two promissory notes to purchase a heavy and medium helicopter, respectively. In December 2015, upon maturity of the notes, the then outstanding balances of $19.0 million and $5.9 million were refinanced, with terms due in December 2020. Final payments of $12.7 million and $4.0 million, respectively, inclusive of interest, were made in December 2020 upon maturity of both promissory notes.
Term Loan Agreement — In connection with the closing of the Merger on June 11, 2020, the Company fully repaid the Term Loan by making $61.5 million in principal payments and $0.6 million in prepayment premiums.
ABL Facility — On April 17, 2018, two of Old Bristow’s subsidiaries entered into an asset-backed revolving credit facility (the “ABL Facility”). The ABL Facility matures in April 2023, subject to certain early maturity triggers related to maturity of other material debt or a change of control of the Company. Amounts borrowed under the ABL Facility are secured by certain accounts receivable owing to the borrower subsidiaries and the deposit accounts into which payments on such accounts receivable are deposited.
On August 18, 2020, the Company entered into a Deed of Amendment and Restatement, Accession, Transfer, Resignation and Confirmation Agreement (the “ABL Amendment”) relating to the ABL Facility (as amended by the ABL Amendment, the “Amended ABL”), by and among the Company, Old Bristow, Bristow Norway AS, Bristow Helicopters Limited and Bristow U.S. LLC, as borrowers and guarantors, the financial institutions from time to time party thereto as lenders and Barclays Bank PLC, in its capacity as agent and security trustee. The ABL Amendment amended the ABL Facility to, among other things, (i) make available to the borrowers an additional “last in, last out” tranche of revolving loan commitments available to the borrowers under the Amended ABL in an aggregate amount not to exceed $5.0 million, (ii) replace Old Bristow with the Company as the parent guarantor under the Amended ABL and (iii) permit the accession at a later date of certain domestic subsidiaries of the Company as borrowers under the Amended ABL and the addition of certain of their receivables to the borrowing base and the collateral for the Amended ABL. The interest rates applicable to loans made under the “last in, last out” tranche of revolving commitments under the Amended ABL are equal to either: (a) the ABR (as defined in the Amended ABL) plus 2.50% per annum or (b) LIBOR or NIBOR (each as defined in the Amended ABL) plus 3.50% per annum. Swingline loans made under the “last in, last out” tranche of revolving commitments under the Amended ABL bear interest at the ABR (as defined in the Amended ABL) plus 2.50% per annum. As a result of the ABL Amendment, the Amended ABL provides for commitments in an aggregate amount of $80.0 million. The Company retains the ability under the Amended ABL to increase the total commitments up to a maximum aggregate amount of $115.0 million, subject to the terms and conditions therein.
As of March 31, 2021 (Successor), there were no outstanding borrowings under the Amended ABL nor had the Company made any draws during the year ended March 31, 2021 (Successor). Letters of credit issued under the Amended ABL in the aggregate face amount of $19.4 million were outstanding on March 31, 2021 (Successor).
LIBOR Transition — In 2020, a number of regulators in conjunction with the FASB and the U.S. Federal Reserve announced their intention to suspend and replace the use of LIBOR by the beginning of calendar year 2022. The effects of this transition from LIBOR to an alternative reference rate may impact the Company’s current indebtedness that is tied to LIBOR, in addition to the potential overall financial market disruption as a result of this phase-out. The Company is currently evaluating the potential effects of this announcement on its underlying debt, but it does not expect the impact to be material.
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