Takeaways from the government's C$5.9b aid package for Air Canada

[TORONTO] The Canadian government announced on Monday a financial aid package for Air Canada that allows the country's largest airline to access up to C$5.9 billion (S$6.3 billion) in funds through a loan programme launched during the pandemic. Here are some takeaways.

- The Canadian government to buy C$500 million worth of Air Canada shares at C$23.1793 each, or a 14.2 per cent discount to Monday's close and about 6 per cent of the airline's expanded share capital.

- Air Canada to get C$1.5 billion in the form of a secured revolving credit facility at a 1.5 per cent premium to the Canadian Dollar Offered Rate. The facility is secured against certain Air Canada assets, including certain intellectual property relating to the Aeroplan loyalty programme.

- Air Canada has issued 14.6 million warrants exercisable for the purchase of an equal number of Air Canada shares at a price of C$27.2698 per share during a 10-year term.

- The airline to secure about C$1.4 billion in the form of an unsecured credit facility to support customer refunds of non-refundable tickets. The facility will have a seven-year term and carry an annual interest rate of 1.211 per cent.

- Air Canada has agreed to resume all regional services suspended due to Covid-19.

- The airline has agreed to certain restrictions on expenses, dividends, share buybacks, and capped senior executive compensation at C$1 million a year each.

- Air Canada has committed to maintain employment at the current level, which is about 14,859.

- The airline agreed to complete the purchase of 33 Airbus A220 aircraft, manufactured at Airbus' Mirabel, Quebec, facility and its existing order of 40 Boeing 737 Max aircraft.

REUTERS