MONTREAL, Nov. 14,
2022 /PRNewswire/ - Air Canada (TSX: AC) today
announced that it has launched a cash tender offer (the
"Offer"), which also constitutes an issuer bid under
Canadian securities laws, pursuant to which Air Canada will offer
to purchase for cancellation up to US$300 million aggregate
principal amount of its outstanding 4.000% Convertible Senior Notes
due July 1, 2025 (CUSIP No. 008911
BF5) (the "Notes") at a purchase price of US$1,220 in cash per US$1,000 principal amount of Notes, plus a cash
payment in respect of all accrued and unpaid interest on such Notes
up to, but excluding, the date on which such Notes are taken up by
Air Canada pursuant to the Offer. The Offer will expire at
11:59 pm (Montreal time) on December 19, 2022,
unless extended, varied or withdrawn by Air Canada.
If the principal amount of all Notes properly deposited or
tendered and not withdrawn in accordance with the Offer exceeds in
the aggregate US$300 million (or such
larger principal amount as Air Canada, in its sole discretion, may
determine it is willing to take up and pay for, subject to
applicable law), then the Notes to be purchased by Air Canada will
be purchased on a pro rata basis according to the principal amount
of Notes deposited or tendered by the holders of Notes
("Noteholders").
The Notes trade on an over the counter market. As of
November 11, 2022, there was
US$540.2 million principal
amount of Notes issued and outstanding.
Air Canada will fund any
purchases of Notes pursuant to the Offer from available cash on
hand. Air Canada believes that the
purchase of Notes pursuant to the Offer is in the best interests of
the company and represents an efficient use of Air Canada's
financial resources, allowing it to further deleverage its balance
sheet.
The Offer is not conditional upon any minimum principal amount
of Notes being deposited or tendered, but is subject to various
other conditions as detailed in the offer to purchase, its
accompanying issuer bid circular, and the related letter of
transmittal, containing the terms and conditions of the Offer and
instructions for Noteholders wishing to tender their Notes pursuant
to the Offer (collectively, "Offer Documents"). The Offer
Documents will be mailed to registered Noteholders on November 14, 2022 and will be filed with the
applicable securities regulators and available on SEDAR at
www.sedar.com. Free copies of the Offer Documents may also be
obtained by contacting the Tender Agent (as defined below) at the
numbers below.
Ernst & Young LLP (the "Valuator") was engaged by Air
Canada as the independent valuator to prepare a formal valuation of
the Notes in accordance with applicable Canadian securities laws.
The valuation report contains the Valuator's opinion that, based on
the scope of their review and subject to the assumptions,
restrictions and limitations provided therein, the fair market
value of the Notes, exclusive of accrued interest, per US$1,000 principal amount of Notes, at
November 11, 2022, ranges from approximately US$1,165 to US$1,235, or a mid-point of US$1,200. A copy of the valuation report
will be attached to the issuer bid circular. The valuation report
is not, and should not be construed to be, as a recommendation to a
Noteholder or to others, to take any course of action.
All of the Notes are held in book-entry form. If you hold Notes
through a broker, dealer, commercial bank, trust company or other
nominee, you must contact such broker, dealer, commercial bank,
trust company or other nominee if you wish to tender Notes pursuant
to the Offer. You should check with such broker, dealer, commercial
bank, trust company or other nominee to determine whether they will
charge you a fee for tendering Notes on your behalf. You should
also confirm with the broker, dealer, bank, trust company or other
nominee any deadlines by which you must provide your tender or
deposit instructions, because the relevant deadline set by such
nominee may be earlier than the deadlines set forth herein.
D.F. King & Co., Inc. has been engaged by Air Canada to act
as depositary and information and tender agent for the Offer (the
"Tender Agent"). Noteholders who have questions with respect
to the Offer, or require any assistance with respect to the Offer,
including how to tender Notes pursuant to the Offer, may contact
the Tender Agent by telephone at (888) 541-9895 (toll-free in
North America) or at (212)
269-5550 (collect call outside North
America) or by email at: ac@dfking.com.
Morgan Stanley (the "Dealer Manager") is acting as dealer
manager to Air Canada in connection with the Offer. Any questions
or requests for information may be directed to the Dealer Manager
at 855-483-0952 (toll-free).
None of Air Canada, its directors, the Dealer Manager, the
Tender Agent, the Valuator or any of their respective
affiliates, makes any recommendation to any Noteholder as to
whether to deposit or refrain from depositing all or any portion of
their Notes under the Offer. Noteholders are strongly urged to
review and evaluate carefully all information in the Offer
Documents, to consult their own financial, tax and legal advisors,
and to make their own decisions as to whether to deposit or refrain
from depositing or tendering their Notes to the Offer and, if
deposited or tendered, what principal amount of Notes to deposit or
tender. Noteholders should carefully consider the income tax
consequences of accepting the Offer and depositing Notes to the
Offer.
This press release is for informational purposes only and does
not constitute an offer to buy or the solicitation of an offer to
sell Notes. The solicitation and the offer to buy the Notes will
only be made pursuant to Offer Documents to be filed with the
applicable securities regulators in Canada.
CAUTION REGARDING
FORWARD-LOOKING INFORMATION
This news release includes forward-looking statements within
the meaning of applicable securities laws. Forward-looking
statements relate to analyses and other information that are based
on forecasts of future results and estimates of amounts not yet
determinable. These statements may involve, but are not limited to,
comments relating to guidance, strategies, expectations, planned
operations or future actions. Forward-looking statements are
identified using terms and phrases such as "preliminary",
"anticipate", "believe", "could", "estimate", "expect", "intend",
"may", "plan", "predict", "project", "will", "would", and similar
terms and phrases, including references to assumptions. These
statements also include, statements related to the expiration of
the Offer, the timing of the expiry of the Offer, and the take up
and payment for Notes deposited pursuant to the Offer, the source
of funds for the Offer and Air Canada's expectation regarding value
to shareholders as a result of the Offer.
Forward-looking statements, by their nature, are based on
assumptions including those described in this news release and are
subject to important risks and uncertainties. Forward-looking
statements cannot be relied upon due to, among other things,
changing external events and general uncertainties of the business
of Air Canada.
Actual results may differ materially from results indicated
in forward-looking statements due to a number of factors, including
volatility in the market price of the securities of Air Canada,
satisfaction or waiver of the conditions to the Offer, the extent
to which Noteholders determine to tender their Notes to the Offer,
the ongoing effects from the COVID-19 pandemic, economic and
geopolitical conditions such as the military conflict between
Russia and Ukraine, Air Canada's ability to successfully
achieve or sustain positive net profitability, industry and market
conditions and the demand environment, Air Canada's ability to pay
its indebtedness and maintain or increase liquidity, competition,
Air Canada's dependence on technology, cybersecurity risks, energy
prices, Air Canada's ability to successfully implement appropriate
strategic and other important initiatives (including Air Canada's
ability to manage operating costs), other epidemic diseases,
terrorist acts, war, Air Canada's dependence on key suppliers
(including government agencies and other stakeholders supporting
airport and airline operations), Air Canada's ability to
successfully operate its loyalty program, interruptions of service,
Air Canada's ability to attract and retain required personnel, the
availability and onboarding of Air Canada's workforce, casualty
losses, changes in laws, regulatory developments or proceedings,
climate change and environmental factors (including weather systems
and other natural phenomena and factors arising from anthropogenic
sources), Air Canada's dependence on regional and other carriers,
Air Canada's ability to preserve and grow its brand, employee and
labour relations and costs, Air Canada's dependence on Star
Alliance® and joint ventures, pending and future litigation and
actions by third parties, currency exchange, limitations due to
restrictive covenants, insurance issues and costs, pension plans,
as well as the factors identified in Air Canada's public disclosure
file available at www.sedar.com and, in particular, those
identified in section 18 "Risk Factors" in Air Canada's 2021
MD&A and section 14 "Risk Factors" of Air Canada's 2022 Third
Quarter MD&A. The forward-looking statements contained in this
news release represent Air Canada's expectations as of the date of
this news release (or as of the date they are otherwise stated to
be made) and are subject to change after such date. However, Air
Canada disclaims any intention or obligation to update or revise
any forward-looking statements whether because of new information,
future events or otherwise, except as required under applicable
securities regulations.
About Air Canada
Air Canada is Canada's largest airline, the country's flag
carrier and a founding member of Star
Alliance, the world's most comprehensive air transportation
network. Air Canada provides
scheduled passenger service directly to 50 airports in Canada, 47 in the
United States and 69 internationally. It holds a Four-Star
ranking from Skytrax. Air Canada's Aeroplan program is
Canada's premier travel loyalty
program, where members can earn or redeem points on the world's
largest airline partner network of 45 airlines, plus through an
extensive range of merchandise, hotel and car rental rewards. Its
freight division, Air Canada Cargo, provides air freight lift
and connectivity to hundreds of destinations across six continents
using Air Canada's passenger flights and cargo-only flights with
its fleet of Boeing 767-300 freighters. Air Canada has committed to a net zero emissions
goal from all global operations by 2050.
Internet:
aircanada.com/media
Sign up for Air Canada news: aircanada.com
Media Resources:
Photos
Videos
B-Roll
Articles
View original content to download
multimedia:https://www.prnewswire.com/news-releases/air-canada-announces-offer-to-purchase-up-to-us300-million-aggregate-principal-amount-of-its-4-000-convertible-senior-notes-due-2025--301676899.html
SOURCE Air Canada