‘Twists and turns’ in getting regulatory approval for air carrier investment

Copyright Sikorsky Aircraft Corporation. All rights reserved.

When US-based Bristow Group wanted to invest in Canadian air carrier Cougar Helicopters, the regulatory process was demanding. Mitchell Gropper, QC, of Farris, Vaughan, Wills & Murphy LLP, was lead transactional counsel for Cougar and VIH Aviation Group, its parent company. He spoke to Lexpert about the deal:

Every transaction has different twists and turns to it. In this transaction, obtaining regulatory approval required a great deal of negotiation between the Canadian air carrier, Cougar, and the US investor, Bristow. The result is a large number of legal counsel involvement, including special aircraft regulatory counsel.

There are complex regulatory issues involving a significant investment in a Canadian-licensed air carrier by a ‘non-Canadian’.  The Canada Transportation Act requires that 75 per cent of the voting shares of the licensed carrier be owned by a Canadians, and “control in fact” be held by Canadians. While the Canadian Transportation Agency has published guidelines on this matter, and there are a few reported decisions, negotiating the actual terms and conditions of the investment requires a delicate balance between the perceived requirements of the investor and view of “control in fact” taken by the Canadian Transportation Agency.

The deal, which saw Bristow buy a minority interest in Cougar from VIH and its affiliates, included eight Sikorsky S-92 helicopters (pictured above), ground facilities in St. John’s and Halifax, and other assets.

Bristow’s investment totals US$250 million plus a three-year earn-out of up to US$40 million based on Cougar achieving agreed-upon performance targets.

The decision to approve the deal was released by the Canadian Transportation Agency on September 13 and the deal closed on October 3.


Bristow was represented by its general counsel, Chip Earle, and by Wachtell, Lipton, Rosen & Katz, as US Transaction Counsel (David Katz, Michael Rosenblat, Derek Liu and Damian Peterson), by Goodmans LLP, as Canadian Transaction Counsel (Jonathan Lampe, Andrew Wiseman, Robert Vaux, Celia Rhea, Dan Dedic and Leah Ramkaran) and by Burnet, Duckworth & Palmer LLP, as Special Aviation Counsel (Dino DeLuca, Colby Dewart and Romeo Rojas).

Cougar and VIH were represented by its primary counsel, William Steeper, by Farris, Vaughan, Wills & Murphy LLP as transaction counsel (Mitchell Gropper, QC, Jamie Matthews, Stephanie Daniels and Aaron Lightman) and by Borden Ladner Gervais LLP as borrower counsel (Magnus Verbrugge, Edward Wang and Cherie Mah)

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