Air Canada Looking to Raise Over $1 Billion with Shares and Notes

Air Canada has commenced a public offering of Class A Variable Voting Shares and/or Class B Voting Shares of the company for gross proceeds of approximately C$500 million and a concurrent private placement of convertible senior unsecured notes for gross proceeds of approximately US$400 million.

Air Canada intends to grant the underwriters an option to purchase up to an additional 15% of the shares in the Share Offering, exercisable in whole or in part at any time until 30 days after closing of the Share Offering and up to an additional 15% of the Convertible Notes in the Convertible Notes Offering, exercisable in whole or in part at any time until 13 days after closing of the Convertible Notes Offering.

The Share Offering will be priced in the context of the market with the price and other final terms to be determined at the time of entering into an underwriting agreement for the Share Offering.

The Convertible Notes will be senior unsecured obligations of the company and will accrue interest payable semi-annually in arrears and will mature on 1 July 2025, unless earlier repurchased, redeemed or converted. The Convertible Notes will be convertible into cash, Class A Variable Voting Shares and/or Class B Voting Shares of the company or a combination thereof, at the company's election. The interest rate, initial conversion rate and other terms of the Convertible Notes will be determined at the time of pricing of the Convertible Notes Offering.

Completion of the Offerings will be subject to various conditions, including the approval of the Toronto Stock Exchange.

Air Canada has stated that it intends to use the net proceeds from the Offerings to supplement the company's working capital and other general corporate purposes.

TD Securities Inc., J.P. Morgan Securities Canada Inc. and Citigroup Global Markets Canada Inc. are acting as joint active book-running managers for the Share Offering and J.P. Morgan Securities LLC, TD Securities Inc. and Citigroup Global Markets Canada Inc. are acting as joint active book-running managers for the Convertible Notes Offering. 

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