/NOT FOR DISTRIBUTION IN THE UNITED
STATES OR OVER UNITED
STATES WIRE SERVICES/
HALIFAX, NS, March 16, 2021 /CNW/ - Chorus Aviation Inc.
("Chorus" or the "Company") (TSX: CHR) announced today that it has
entered into an agreement with a syndicate of underwriters led by
RBC Capital Markets, as bookrunner, under which they have agreed to
purchase from Chorus and sell to the public $50 million units of Chorus (the "Units") at
a price of $4.60 per Unit (the "Unit
Price") and $50 million aggregate
principal amount of convertible senior unsecured debentures at a
price of $1,000 per debenture, with
an interest rate of 6% per annum, payable semi-annually on the last
day of June and December commencing on December 31, 2021 and maturing on June 30, 2026 (the "Debentures"), resulting in
combined gross proceeds to Chorus of $100
million (the "Offering"). If the Over-Allotment Option, as
defined hereinafter, is exercised in full, gross proceeds to Chorus
will amount to $115 million.
Concurrently, Chorus has entered into agreements with Alberta
Investment Management Corporation ("AIMCo"), on behalf of certain
of its clients, and NordStar Capital to purchase from Chorus an
aggregate of $15 million of Units at
the Unit Price and $15 million
aggregate principal amount of Debentures at a price of $1,000 per Debenture (the "Private
Placement").
The net proceeds of the Offering and concurrent Private
Placement will be used to position Chorus to pursue growth
opportunities (including purchasing additional aircraft to continue
expanding the Company's regional aircraft leasing business, and
expanding into additional contracted flying operations), provide
additional balance sheet flexibility, repay indebtedness (including
the use of up to 35% of the Debenture Offering proceeds to repay
part of the balance outstanding under the Company's US$100 million revolving debt facility), and for
general corporate purposes.
"We are very pleased to be launching this capital raise enabling
us to bolster the balance sheet and prudently move ahead with
re-starting our growth initiatives." stated Joe Randell, President and Chief Executive
Officer, Chorus. "It has been a challenging year; however, I am
proud of the way we are managing through this pandemic, and with
the finalization of the revised capacity purchase agreement and
this financing, we are now ready to turn our attention to the
future. Our industry is seeing positive trends and as travel demand
returns, most particularly in regional and short haul markets,
Chorus is well positioned to pursue aircraft sale and leaseback
opportunities with high quality airlines." Joe added, "We are
delighted that two sophisticated institutional investors such as
AIMCo and NordStar Capital are participating in this transaction,
demonstrating confidence in our growth strategy."
"We are impressed with Chorus' world class global operational
excellence and believe that this financing positions it well to
execute on a number of growth opportunities", said David Tiley, Director, Public Equities, AIMCo.
"Chorus Aviation represents a strong addition to our clients'
public markets portfolio and is aligned with our strategy for
seeking long term value creation. We look forward to future
opportunities to expand our relationship with Chorus as it
continues to pursue its strategic ambitions."
Each Unit will be comprised of one common share (the "Common
Shares") of the Company which, for greater certainty, shall mean
for Canadian investors participating in the offering, Class B
Voting Shares of Chorus, and for non-Canadian investors
participating in the offering, Class A Variable Voting Shares of
Chorus, and one-half of a Common Share purchase warrant of the
Company. Each full Warrant shall entitle the holder thereof to
purchase one Common Share at an exercise price of $6.20 at any time for a period of 12 months
following the closing of the Offering.
The Debentures will be convertible at the holder's option into
Common Shares at a conversion price of $6.35 per Common Share (the "Conversion Price"),
subject to adjustment in certain circumstances. The Debentures will
not be redeemable by the Company before June
30, 2024. On or after June 30,
2024 and prior to June 30,
2025, the Debentures may be redeemed in whole or in part
from time to time at the option of the Company at par plus accrued
and unpaid interest, if any, to but excluding the date of
redemption, provided that the arithmetic average of the volume
weighted average trading price of the Common Shares on the Toronto
Stock Exchange (the "TSX") for the 20 consecutive trading days
ending five trading days preceding the date on which notice of
redemption is given is at least 125% of the Conversion Price. On or
after June 30, 2025, the Debentures
may be redeemed at the option of the Company at any time at par
plus accrued and unpaid interest, if any, to but excluding the date
of redemption.
Chorus has also granted the underwriters the option to purchase
up to an additional $7.5 million of
Units and up to an additional $7.5
million aggregate principal amount of Debentures,
exercisable in whole or in part, to cover over-allotments, if any,
and for market stabilization purposes, during the 30 days following
the closing of the offering (the "Over-Allotment Option").
Closing is expected to occur on or about April 6, 2021, and is subject to the receipt of
all required regulatory approvals including that of the TSX.
The Units and Debentures will be offered by way of a short form
prospectus in all of the provinces and territories of Canada as well as by way of private placement
in Canada and may also be offered
by way of private placement in the United
States. This news release shall not constitute an offer to
sell or the solicitation of an offer to buy, nor shall there be any
offer, solicitation or sale of the securities in any province,
state or jurisdiction in which such offer, solicitation or sale
would be unlawful. The Units and Debentures have not been and will
not be registered under the U.S. Securities Act of 1933, as
amended, and may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the U.S.
Securities Act of 1933 and other applicable securities laws.
This concludes the investment discussions referenced in Chorus'
news release dated February 18,
2021.
About Chorus
Chorus is a global provider of integrated regional aviation
solutions. Chorus' vision is to deliver regional aviation to the
world. Headquartered in Halifax, Nova
Scotia, Chorus is comprised of Chorus Aviation Capital – a
leading, global lessor of regional aircraft, and Jazz Aviation and
Voyageur Aviation – companies that have long histories of safe
operations with excellent customer service. Chorus provides a full
suite of regional aviation support services that encompasses every
stage of an aircraft's lifecycle, including aircraft acquisitions
and leasing; aircraft refurbishment, engineering, modification,
repurposing, and preparation; contract flying; and aircraft and
component maintenance, disassembly, and parts provisioning. Chorus
Class A Variable Voting Shares and Class B Voting Shares trade on
the Toronto Stock Exchange under the trading symbol 'CHR'.
www.chorusaviation.com
About AIMCo
AIMCo is one of Canada's
largest and most diversified institutional investment managers with
more than C$120 billion of assets
under management. AIMCo was established on January 1, 2008 with a mandate to provide
superior long-term investment results for its clients. AIMCo
operates at arms-length from the Government of Alberta and invests globally on behalf of 33
pension, endowment and government funds in the Province of
Alberta. AIMCo's head office is
located in Edmonton, Alberta, with
additional offices located in Toronto, London, and Luxembourg. More information is available at
www.aimco.ca
About NordStar Capital
NordStar Capital is a Canadian company led by Jordan Bitove and Paul
Rivett, and wholly owned by the Bitove and Rivett families.
NordStar Capital is a long-term focused, relationship-based,
innovative funding and advisory services firm.
Forward-Looking Information
This news release contains 'forward-looking information' as
defined under applicable Canadian securities legislation.
Forward-looking information is identified by the use of terms and
phrases such as "anticipate", "believe", "could", "estimate",
"expect", "intend", "may", "plan", "predict", "potential",
"project", "will", "would", and similar terms and phrases,
including references to assumptions. Forward-looking information
involves known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements to
differ materially from those expressed in the forward-looking
information. Examples of statements containing forward-looking
information in this news release include the anticipated closing
and closing date of the Offering and the Private Placement, and the
anticipated use of proceeds. Results indicated in forward-looking
information may differ materially from actual results for a number
of reasons, including the failure to close the transactions
referenced in this news release on the terms and conditions
currently contemplated by Chorus, or at all, as well as those
described in Chorus' most recent Annual Information Form and
Management's Discussion and Analysis of Results of Operations and
Financial Condition. Statements containing forward-looking
information in this news release are made as of the date of this
news release and Chorus does not undertake any obligation to
publicly update such statements to reflect new information,
subsequent events or otherwise unless required by applicable
securities laws.
SOURCE Chorus Aviation Inc.