Air Canada parent company to issue equity

Airline Industry Information, March 22, 2005

AIRLINE INDUSTRY INFORMATION-(C)1997-2005 M2 COMMUNICATIONS LTD

Air Canada's parent company ACE Aviation Holdings Inc said on Monday (21 March) that it plans to refinance a loan from GE Capital by raising CAD600m in a combination of debt and equity.

The company said it would offer about CAD350m in class A and B shares, and CAD250m in convertible notes, and will use the proceeds to repay CAD540m in a credit facility from GE Capital. The repayment will reportedly cut ACE's net annual interest costs by about CAD27m.

After issuing the equity and repaying the GE Capital loan, ACE will have cash and committed credit facilities of CAD2bn and its net debt will be about CAD4bn.

On Sunday (20 March) ACE reiterated its forecast for earnings before interest, taxes, depreciation, amortization and aircraft rent in 2005 of CAD1.6bn.

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