MD Helicopters Files For Bankruptcy

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Arizona-based aircraft manufacturer MD Helicopters has entered into an asset purchase agreement with a creditor consortium led by Bardin Hill and MBIA Insurance Corporation. As part of the process, the company has filed for Chapter 11 bankruptcy. MD stated that it believes doing so will allow for a quick and orderly sale with the consortium serving as a stalking horse bidder.

“Since last year, we have been exploring a potential sale of the Company that would enable us to move forward with new ownership to support MD’s continued manufacturing operations and maintenance services long into the future, as well as deleverage our capital structure,” said MD Helicopters director Alan Carr. “After a thorough review of the options available to us, we believe this transaction and court-supervised process will help achieve our objective and create the best path forward for MD and all of our stakeholders.”

According to MD Helicopters, the consortium will acquire most of its assets and “provide new capital to strengthen MD’s financial position and support the Company’s continued ability to manufacture and service its high-performance helicopters.” MD is planning to continue regular operations through the process with the aid of $60 million in debtor-in-possession (DIP) financing from the consortium. MD Helicopters currently produces models including the MD 500E, MD 600N and MD 902 Explorer.

Kate O’Connor works as AVweb's Editor-in-Chief. She is a private pilot, certificated aircraft dispatcher, and graduate of Embry-Riddle Aeronautical University.

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6 COMMENTS

  1. What is a stalking horse bid?

    A stalking horse bid is an initial proposal to buy an asset from a distressed company (most often one that is bankrupt or in bankruptcy protection). Usually, the company or its receiver will select a buyer willing to make an offer. The idea is to establish a minimum price for the asset, by getting the first bid out in the open. This keeps lowball offers off the table and sets up a competitive bidding process. The stalking horse bidder usually gets a break fee if it doesn’t end up as the eventual winner.