Helicopter-leasing company Waypoint files for Chapter 11

BY Fraser Tennant

The latest casualty of depressed global oil and gas prices, Ireland-based helicopter leasing company Waypoint Leasing Holdings Ltd has filed for Chapter 11 bankruptcy in New York and plans to restructure.

Waypoint, along with certain of its subsidiaries, expects to proceed to move through the restructuring process as quickly as possible, and is committed to working with its lenders and stakeholders toward a speedy and successful transformation of the company.

The world’s largest independent helicopter leasing company, Waypoint’s portfolio includes approximately 160 aircraft with a market value of $1.6bn. The company is backed by entities controlled by billionaire investors George Soros and Michael Dell.

“Waypoint’s Chapter 11 filing is the next step in our holistic transformation strategy and will provide us with the opportunity to emerge with a stronger, sustainable and more competitive balance sheet,” said Hooman Yazhari, chief executive of Waypoint. “It will further catalyse our ability to implement many of the innovative and evolutionary changes to our business model, allowing us to meet head-on the challenges and opportunities which our displaced industry presents.”

Over the past six months, Waypoint has been actively working with its lenders to de-lever its balance sheet and reposition for strength and stability. The company also plans to continue that work during the Chapter 11 process and, in addition to de-levering, will continue to implement strategic initiatives.

“During our continued transformation, our team will work as hard as possible to demonstrate Waypoint’s true value as the most dedicated and capable steward of our assets,” Mr Yazhari continued. “We will also continue our intense focus to deliver on the needs and requirements of our customers.”

Waypoint also stated that it would use the Chapter 11 process to facilitate the acquisition of Waypoint by a new owner, with a continued focus on its customers.

Mr Yazhari concluded: “I am incredibly grateful for our supportive stakeholders, including our global customer base, original equipment manufacturers and maintenance, repair and operating suppliers, other partners and our talented team of employees.”

Established in 2013, Waypoint’s fleet is supported by over 40 employees based in eight offices worldwide. In addition to Ireland, Waypoint has offices in London, the US, Canada, Hong Kong, Brazil and South Africa.

News: Helicopter Company Backed by Soros, Dell Flies into Chapter 11

Gastar Exploration files for Chapter 11 bankruptcy

BY Fraser Tennant

Struggling financially due to the slump in oil prices seen in the past few years, energy company Gastar Exploration has taken stock and entered into a restructuring support agreement (RSA) to be implemented via a pre-packaged Chapter 11 bankruptcy plan of reorganisation.

Houston-based Gastar has filed for bankruptcy with the support of its largest creditor and shareholder, private equity firm Ares Management LLC. While the RSA and Chapter 11 filing will clear more than $300m of Gastar’s debt, as well as provide $100m in new financing to fund the restructuring process and ongoing business operations, controlling ownership will cede to Ares.

Trading of Gastar’s common stock was suspended by the New York Stock Exchange in September due to the company’s low trading price.

“The restructuring agreement is a comprehensive plan that will ensure Gastar remains competitive in its industry,” said Jerry R. Schuyler, interim chief executive and board chairman of Gastar. “We can now set our sights on facilitating a smooth, efficient in-court restructuring while continuing to meet our obligations to our employee and vendor constituencies. I am proud of the exceptional hard work and dedication of all our employees throughout this process."

The agreed restructuring was developed following numerous attempts to find strategic alternatives – including selling the company – that would have allowed Gastar to avoid a bankruptcy filing.

Serving as Gastar’s legal counsel is Kirkland & Ellis LLP, with Opportune LLP serving as restructuring adviser. Perella Weinberg Partners LP is serving as financial adviser.

Subject to approval of the plan of reorganisation by the Bankruptcy Court for the Southern District of Texas and the satisfaction of certain conditions, Gastar expects to emerge from Chapter 11 before the end of 2018. 

News: New restructuring deal for Gastar will support prepackaged bankruptcy

Another US retailer on the ropes as Sears files for bankruptcy

BY Fraser Tennant

In a further body blow to the US retail industry, Sears Holdings Corporation has filed for Chapter 11 bankruptcy protection – yet another retail giant struggling with mounting debt and the increasing shift in consumer behaviour toward shopping online.

Through the Chapter 11 process, Sears – which also owns Kmart – and certain of its subsidiaries are seeking to establish a sustainable capital structure, continue streamlining its operating model and grow profitably for the long term. The company listed more than $10bn in debts and more than $1bn in assets in its filing.

The company hopes to move through the restructuring process as smoothly and expeditiously as possible, and is committed to pursuing a plan of reorganisation as it continues negotiations with major stakeholders.

“The Chapter 11 process will give Sears the flexibility to strengthen its balance sheet, enabling the company to accelerate its strategic transformation, continue right sizing its operating model and return to profitability,” said Edward S. Lampert, chairman of Sears Holdings. “Our goal is to achieve a comprehensive restructuring as efficiently as possible, working closely with our creditors and other debtholders, and be better positioned to execute on our strategy and key priorities."

To this end, Sears intends to continue paying employee wages and benefits, honour member programmes, and pay vendors and suppliers in the ordinary course for all goods and services provided on or after the Chapter 11 filing date.

"Over the last several years, we have worked hard to transform our business and unlock the value of our assets," said Mr Lampert. "While we have made progress, the plan has yet to deliver the results we have desired, and addressing the company's immediate liquidity needs has impacted our efforts to become a profitable and more competitive retailer.”

Sears has received commitments for $300m in senior priming debtor-in-possession (DIP) financing from its senior secured asset-based revolving lenders, and is negotiating a $300m subordinated DIP financing with ESL Investments, Inc – its largest stockholder and creditor.

Subject to court approval, the DIP financing is expected to improve Sears’ financial position immediately and support its operations during the financial restructuring process.

Mr Lampert concluded: "As we look toward the holiday season, Sears and Kmart stores remain open for business and our dedicated associates look forward to serving our members and customers. We thank our vendors for their continuing support through the upcoming season and beyond.”

News: US retail giant Sears files for bankruptcy

700 stores to close as Mattress Firm files for Chapter 11 protection

BY Fraser Tennant

Due to what it describes as “significant operational challenges”, specialty mattress retailer Mattress Firm has filed for Chapter 11 bankruptcy protection in order to strengthen its balance sheet and optimise its store footprint.

The filing at the US Bankruptcy Court in Delaware gives the company access to new financing to support the business, establishes an efficient and orderly process for closing certain economically inefficient store locations, and provides for all trade creditors to continue being paid in full for goods and services provided.

Court documents reveal that Mattress Firm is projected to lose approximately $150m in fiscal year 2018. The company also has more than $1bn in liabilities and more than 50,000 creditors, with Atlanta-based mattress maker Simmons Manufacturing Co. its largest creditor at almost $65m.

“The process we have initiated will allow us to strengthen our balance sheet and accelerate the optimisation of our store portfolio,” said Steve Stagner, executive chairman, president and chief executive of Mattress Firm. “Leading up to the holiday shopping season, we will exit up to 700 stores in certain markets where we have too many locations in close proximity to each other.”

In conjunction with its restructuring plan, Mattress Firm has received commitments for approximately $250m in debtor-in-possession (DIP) financing, which, subject to court approval, will be available to support its ongoing operations during the Chapter 11 proceedings.

“We intend to use the additional liquidity from these actions to improve our product offering, provide greater value to our customers, open new stores in new markets, and strategically expand in existing markets where we see the greatest opportunities to serve our customers,” added Mr Stanger.

The company expects to complete the Chapter 11 restructuring process within two months and has announced commitments for $525m of senior secured credit facilities to fund its emergence from bankruptcy.

Founded in 1986, Mattress Firm has grown to be the largest specialty mattress retailer in the US, with stores in 49 states across the country. In 2016, the company was acquired by Steinhoff International Holdings, N.V.

Mr Stagner concluded: “We thank our suppliers and partners for their continued support. We will continue to provide unmatched value to our customers by offering the best quality beds at prices that fit any budget today, tomorrow and into the future.”

News: Steinhoff's Mattress Firm files for bankruptcy protection, closes stores

British Steel cuts 400 jobs in bid to secure “long-term future”

BY Fraser Tennant

In a streamlining process designed to ensure its long-term growth, British Steel is to cut 400 jobs at its sites in the UK, Ireland, France and the Netherlands – approximately 10 percent of its 5000-strong workforce.

The cuts will be made in managerial, professional and administrative roles, despite first quarter profits being a reported £21m.

The company has stated that the cuts are part of the company’s ongoing transformation – which has already seen it commit £170m toward improving its manufacturing operations during its first three years. British Steel was saved from collapse two years ago when investment firm Greybull bought the business for £1 from Tata Steel.

British Steel is also taking further steps to secure a sustainable future, including continuing to improve manufacturing performance and increasing turnover through strong sales.

“We have made a strong start to life as British Steel but our external environment is constantly changing,” said Gerald Reichmann, British Steel’s chief financial officer. “It is unfortunate we need to go through the proposed redundancy process but by focusing on profitable, niche products I am confident we will create a long-term future for our business and the communities in which we operate.”

British Steel has made it clear that no site closures are being considered as part of the streamlining process. The company has also said that it remains committed to making significant investments in its core products – rail, wire rod, construction and special profiles – along with its iron and steel-making operations.

“It is important our business continues to evolve,” said Roland Junck, British Steel’s executive chairman. “We have already committed £120m to capital expenditure projects and are pressing ahead with the £50m upgrade to our Scunthorpe Rod Mill. However, the pace of change we need in this challenging industry requires further and continued investment along with more agile and efficient operations. To help us achieve this, we have to make difficult decisions.”

Mr Reichmann concluded: “Strong market conditions support the approach we are taking – we have a robust order book and continue to secure significant contracts with customers, old and new, around the world.”

News: British Steel plans to shed 400 jobs 'a body blow' to workforce