CD&R is investing an additional $384 million, subject to approval by the CHC shareholders at an extraordinary general meeting, to be held on Nov. 7, and satisfaction of other closing conditions.
Finally, CHC is providing existing shareholders with rights to purchase up to a combined $100 million of additional preferred shares. For the rights offering to existing shareholders to be completed, those shareholders must purchase a minimum combined $50 million of preferred shares. CD&R has agreed to purchase the full $100 million of additional preferred shares if the $50 million threshold in the offering to existing shareholders is not reached. As a result, CD&R’s total investment in CHC could be up to $600 million.
CHC estimates that the net proceeds from the private placement, together with the rights offering and after deducting estimated expenses, will be approximately $572.4 million. 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 $105 million of senior unsecured notes and $130 million of senior secured notes, plus associated premiums.
As part of the transaction and concurrent with the convertible share purchase, CD&R partners John Krenicki, Jr. and Nathan K. Sleeper have joined the CHC board of directors. Krenicki has assumed the role of chairman. William E. Macaulay has resigned from the board, effective Oct. 30.
