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March 13, 2014
12:03 EDTHELICHC Group falls after issuing first earnings report since IPO
Shares of commercial helicopter operator CHC Group are tumbling after the company gave its first earnings report since its initial public offering in January. WHAT'S NEW: Last night, CHC Group reported third quarter adjusted losses per share of 32c, which was better than analysts' consensus expectation of 40c per share in losses. The company reported third quarter revenue of $453.9M, which was below analysts' consensus of about $473M. CHC Group anticipates FY14 revenue to be flat to slightly up from FY13. Analyst had forecast FY14 revenue of $2.04B for the company prior to its report. CHC sees its FY14 adjusted EBITDAR, or earnings before interest, taxes, depreciation, amortization and aircraft rental costs, excluding special items, to be flat to slightly down, reflecting the negative effect of the suspension and subsequent return to service of EC225 aircraft. WHAT'S NOTABLE: On January 17, CHC Group priced its initial public offering of 31M shares at $10 per share. The shares opened for trading that day at $9.30. ANALYST REACTION: In a note to investors following CHC's report, Wells Fargo lowered its estimates for the company's FY14 FY15 earnings and reduced its price target range on the stock to $11-$13 from $12-$14. However, Wells Fargo said it believes that helicopter demand will withstand headwinds from drilling rig utilization and that concern over the supply/demand balance in the helicopter market is currently being overestimated by investors. The firm maintains its Outperform rating on CHC Group. PRICE ACTION: Near noon, shares of CHC Group were down 38c, or 4.27%, to $8.52.
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August 22, 2014
05:12 EDTHELICHC Group announces investment by Clayton, Dubilier & Rice
CHC Group and Clayton, Dubilier & Rice, or CD&R, announced they have entered into definitive agreements for CD&R managed funds to invest $500M in CHC through the purchase of convertible preferred shares to be issued in a private placement. As part of the transaction, CHC also intends to pursue a $100M rights offering of the convertible preferred shares to existing shareholders. CD&R has agreed to purchase convertible preferred shares, if any are not purchased in the rights offering, which could bring CD&Rís total investment amount up to an aggregate of $600M. CHC plans to use proceeds from the investment primarily to reduce debt and other fixed charges. A portion of the proceeds is expected to be used to redeem $105M of senior unsecured notes and $130M of senior secured notes, plus associated premiums. CHC said remaining proceeds will be used to optimize the mix of owned versus leased aircraft, to further reduce debt opportunistically and for other general corporate purposes. Once the full investment of $600M is deployed, CHC projects it will generate approximately $50M-$60M in annualized incremental free cash flow, on a pro-forma basis beyond previous estimates. CD&R will have a 45% ownership position in CHC Group on an as-converted, pro-forma basis, based on a $500M investment and prior to the rights offering. This percentage could decrease or increase depending on participation of existing shareholders in the rights offering. First Reserve Corporation and its affiliates, which purchased CHC in 2008, would retain approximately 29% ownership in CHC, on a pro-forma basis.
August 20, 2014
16:02 EDTHELICHC Group unit selected to provide engine, component support to AAR Airlift
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