Breaking News
Translate

Debt: CHC Helicopters, Aero Contractors sever partnership

By Omoh Gabriel
LAGOS—AGAINST the backdrop of mounting debt and continued service without payment, the management of CHC Helicopter, a novel business initiative in the country, yesterday terminated its partnership with Aero Contractor.
The company’s decision in divesting its investment will throw no fewer than 500 workers engaged by it into the unemployment market.

Aero Contractor, the principal shareholder in the company, is currently going through financial crisis with huge unpaid loans with Oceanic Bank that has resulted in the freezing of its accounts and invariably affected its operations.

Mr. Christine Baird, CHC Helicopter’s Head of Global Operations, said: “As a result, it is with great regret that as from 3 June. CHC will begin to demobilise its services. We are working with ACN customers to find solutions that will cause the least possible upset to our valued customers and employees disclosed that it ended its joint partnership with Aero Contractors Nigeria (ACN) yesterday.

According to the management of the company CHC’s decision to sever its relationship with Aero Contractors arose from after more than two years of effort to come to a mutually agreeable solution, as a result of the circumstances created by Oceanic Bank International’s decision to freeze the accounts of Aero Contractors of Nigeria which has created a commercially untenable situation for the helicopter company.

But the Central Bank on Monday said it has expanded the N 500 billion power and industry revival funds to include the aviation sector of the Nigerian economy as airline operators can now access the fund just the same way industrialist can access the fund. Those airline that are currently indebted to the banks can refinance their loans through the window provided by the CBN and amortise them over a period of 10-15 years.

According to the apex bank the inclusion of the aviation sector is based on the fact that most of the airlines in the country are heavily indebted to banks which is a risk to the banks concerned in particular and by extension the banking sector. According to the apex bank the decision is also to assist to prop up the demand side to facilitate continued economic growth. This the CBN said will help put off the feared financial crisis in the aviation industry.

According to him CHC does not want to leave Nigeria but the company must cease to operate a service for which it has not received payment”. Baird explained that for a protracted period during which CHC has not been paid for its services, the company had continued operations in order to meet its commitment to ACN customers and facilitate development of Nigeria ’s offshore oil industry.

“The Oceanic Bank has imposed conditions that make it impossible for Aero Contractors to provide CHC with an acceptable payment schedule for services rendered”, he said.

Recognising the hardship this will create for Aero Contractor Nigeria’s customers, Baird assured that the company is working diligently to facilitate solutions for these companies. “We sincerely apologise for any inconvenience or disruption that this development may cause them. We acknowledge that this is not the level of customer service our valued clients in Nigeria – and around the world – have come to expect from CHC and we ask for their patience and understanding as we work through this process”.

Vanguard gathered that already CHC has begun the process of demobilising its expatriate staff and assets from Nigeria.

The process is expected to be completed with the co-operation of all parties, in accordance with contractual agreements and in full compliance with Nigerian law. “Despite the challenges we have faced, CHC believes that Nigeria presents a tremendous opportunity for development of rotary-wing operations. We look forward to establishing new relationships that will allow us to resume our services and support the Nigerian Government’s stated desire to grow its national oil and gas production”. Baird reaffirmed.

Baird expressed deep gratitude to all its employees, contractors, suppliers and others, thanking them for having worked tirelessly under adverse circumstances to ensure that CHC’s superior service and unmatched safety record were maintained during its period of operation.

“We also extend our gratitude to all those authorities and Government representatives who attempted to intervene on our behalf in order to find a satisfactory resolution to the intractable problems we have encountered. CHC regrets the events that have led to this decision and, despite the difficult circumstances; we continue to believe in Nigeria and its people”.

It will be recalled that, CHC entered Nigeria in 2004 when it purchased Schreiner. With the acquisition, CHC inherited a 40 per cent shareholding in Aero Contractors. CHC entered Nigeria in 2004 when it purchased Schreiner. With that acquisition, CHC inherited a 40 per cent shareholding in Aero Contractors of Nigeria.

In 2008, CHC Helicopter was purchased by US-private equity firm First Reserve. Since then CHC has sharpened its business model and determined that it will focus on three specific business sectors in which it is world-class: helicopter maintenance, Search and Rescue, and offshore oil and gas transportation.


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.