ACE Aviation and Air Canada announce the pricing for the initial public offering of Air Canada
MONTREAL, Nov. 16 - ACE Aviation Holdings Inc. and Air Canada announced today that they have entered into agreements with a group of underwriters to sell an aggregate of 25 million Class A Variable Voting Shares and Class B Voting Shares (the "Offered Shares") in the capital of Air Canada at a price of $C21 per Offered Share, of which an aggregate of 9,523,810 Variable Voting Shares and Voting Shares (the "Treasury Shares") are being issued and sold by Air Canada for gross proceeds of $200 million, and an aggregate of 15,476,190 Variable Voting Shares and Voting Shares (the "Secondary Shares") are being sold by ACE Aviation Holdings Inc., Air Canada's sole shareholder, for gross proceeds of $325 million.
In addition, ACE has granted the underwriters an over-allotment option to purchase up to an additional 3.75 million shares representing 15 per cent of the Offered Shares, for a period of up to 30 days following closing. The offering is expected to close on or about November 24, 2006. An aggregate of 100 million Class A Variable Voting Shares and Class B Voting Shares in the capital of Air Canada will be issued and outstanding. ACE will retain control of Air Canada through a 75% majority interest (71.25% in the event that the over-allotment option is exercised in full).
Air Canada will use its proceeds from the treasury offering for general corporate purposes, including the partial funding of its fleet renewal program. Air Canada will not receive any of the proceeds from the secondary offering of Air Canada shares by ACE or from the exercise of the underwriters' over-allotment option, if any.
The underwriting syndicate is led by RBC Capital Markets, Citigroup Global Markets Canada Inc. and TD Securities Inc. and also includes BMO Nesbitt Burns Inc. and CIBC World Markets Inc. Following the completion of the offering and the pre-closing transactions referred to in the final base PREP prospectus, management expects that Air Canada will have cash and cash equivalents in excess of $2 billion.
In addition, Air Canada will also have access to a $400 million senior secured revolving credit facility pursuant to an amended and restated credit agreement entered into with a syndicate of lenders with Bank of Montreal acting as the administrative agent. The facility will be used by Air Canada for working capital and general corporate purposes and will become effective upon the satisfaction of certain customary conditions, including the completion of the offering.
The securities offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or any applicable exemption from the registration requirement of such Act.
This press release does not constitute an offer to sell or the solicitation of any offer to buy nor will there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.
ACE Aviation is a holding company of various aviation interests including Air Canada, Aeroplan Limited Partnership, Jazz Air LP and ACTS Limited Partnership. Air Canada is Canada's largest domestic and international airline and the largest provider of scheduled services in the Canadian market, the Canada-U.S. transborder market and in the international market to and from Canada.
Together with it regional affiliate Jazz, Air Canada serves 31 million customers annually and provides direct passenger service to 157 destinations on five continents. Air Canada is a founding member of Star Alliance providing the world's most comprehensive air transportation network.
(From Air Canada)
