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

KEYWORDS IN THIS ARTICLE

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes