Redemption of $60.0 million
or approximately 75.0%
HALIFAX,
Jan. 7, 2014 /CNW/ - Chorus Aviation
Inc. ('Chorus') (TSX: CHR.B CHR.A CHR.DB) today announced that is
has exercised its right to partially redeem its 9.50% Convertible
Unsecured Subordinated Debentures ('Debentures') maturing on
December 31, 2014, in accordance with
the terms of the trust indenture governing the Debentures ('Trust
Indenture'). On February 10,
2014 (the 'Redemption Date'), Chorus will redeem
C$60.0 million of C$80.21 million aggregate principal amount of
Debentures currently outstanding, representing approximately 75.0%
of the current outstanding balance of Debentures. The Debentures
will be redeemed on a pro rata basis. On redemption,
Chorus will pay to the holders of the redeemed Debentures the
outstanding principal amount of the Debentures to be redeemed (the
'Redemption Price'), together with all accrued and unpaid interest
thereon up to but excluding the Redemption Date, for a total of
C$1,010.671238 per C$1,000.00 principal amount of Debentures.
The Debentures that are redeemed will cease to bear interest from
and after the Redemption Date.
Chorus intends to use surplus cash to pay the
Redemption Price, together with all accrued and unpaid interest
thereon as described above. Following the redemption, C$20.21 million of Debentures will be
outstanding.
Pursuant to the terms of the Trust Indenture,
holders of the Debentures that are to be redeemed have the right
until the last business day prior to the Redemption Date to convert
their Debentures into Class A Variable Voting Shares ('Class A
Shares') or Class B Voting Shares ('Class B Shares') of Chorus, as
applicable, in accordance with the Trust Indenture and the
provisions attaching to the Class A Shares and the Class B Shares ,
at a conversion price of C$5.25 per
Share, being a rate of 190.4762 Shares per C$1,000.00 principal amount of Debentures.
"In addition to our recently announced dividend
increase, using a portion of our year-end surplus cash to early
retire $60.0 million of this 9.5%
maturing debt is another step in our strategy to begin investing in
long-term value propositions that will be accretive to our
shareholders," stated Joseph
Randell, President and Chief Executive Officer, Chorus. "The
balance outstanding on these debentures is planned to be redeemed
with future cash flow from operations either before or at their
December 31, 2014 maturity date."
For more information, please contact Nyari
Chifamba at CIBC Mellon Trust Company, the indenture trustee for
the Debentures, at telephone 416.933.8524, or email
Nyari.Chifamba@bnymellon.com.
Forward Looking Statements
Certain statements in this news release may
contain statements which are forward-looking. These forward-looking
statements are identified by the use of terms and phrases such as
"anticipate", "believe", "could", "estimate", "expect", "intend",
"may", "plan", "predict", "project", "will", "would", and similar
terms and phrases, including references to assumptions. Such
statements may involve but are not limited to comments with respect
to strategies, expectations, planned operations or future
actions.
Forward-looking statements relate to analyses
and other information that are based on forecasts of future
results, estimates of amounts not yet determinable and other
uncertain events. Forward-looking statements, by their nature, are
based on assumptions, including those described below, and are
subject to important risks and uncertainties. Any forecasts or
forward-looking predictions or statements cannot be relied upon due
to, amongst other things, changing external events and general
uncertainties of the business. Such statements involve known and
unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements to differ materially
from those expressed in the forward-looking statements. Results
indicated in forward-looking statements may differ materially from
actual results for a number of reasons, including without
limitation, risks relating to Chorus' relationship with Air Canada,
risks relating to the airline industry, energy prices, general
industry, market, credit, and economic conditions, competition,
insurance issues and costs, supply issues, war, terrorist attacks,
epidemic diseases, acts of God, changes in demand due to the
seasonal nature of the business, the ability to reduce operating
costs and employee counts, secure financing, employee relations,
labour negotiations or disputes, restructuring, pension issues,
currency exchange and interest rates, leverage and restructure
covenants in future indebtedness, dilution of Chorus shareholders,
uncertainty of dividend payments, managing growth, changes in laws,
adverse regulatory developments or proceedings, pending and future
litigation and actions by third parties. The forward-looking
statements contained in this discussion represent Chorus'
expectations as of January 7, 2014,
and are subject to change after such date. However, Chorus
disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise, except as required under applicable
securities regulations.
About Chorus
Chorus was incorporated on September 27,
2010 and is a dividend-paying holding company which owns
Jazz Aviation LP and a number of other companies involved in
aviation related businesses.
Chorus is traded on the Toronto Stock Exchange
under the trading symbols of CHR.A, CHR.B and CHR.DB.
For more information, visit
www.chorusaviation.ca
About Jazz
Jazz Aviation LP has a strong history in Canadian aviation with its
roots going back to the 1930s. Jazz is wholly owned by Chorus
Aviation Inc. and continues to generate some of the strongest
operational and financial results in the North American aviation
industry. As the largest regional in Canada, Jazz has a proven track record of
industry leadership and exceptional customer airline service, and
has leveraged that strength to deliver value to all its
stakeholders. The Company operates more flights and flies to more
Canadian destinations than any other airline and has a workforce of
approximately 4,760 professionals highly experienced in the
challenging and complex nature of regional operations.
There are two airline divisions operated by Jazz
Aviation LP: Air Canada Express and Jazz.
Air Canada Express: Under a capacity
purchase agreement with Air Canada, Jazz provides service to and
from lower-density markets as well as higher-density markets at
off-peak times throughout Canada
and to and from certain destinations in the United States. This month, Jazz is
operating scheduled passenger service on behalf of Air Canada with
approximately 750 departures per weekday to 54 destinations in
Canada and to 25 destinations in
the United States. With a fleet of
122 Canadian-made Bombardier aircraft, Jazz flies more daily
flights to more Canadian destinations than any other airline.
Jazz: Under the Jazz brand, the airline
offers charters throughout North
America with a dedicated fleet of five Bombardier aircraft
for corporate clients, governments, special interest groups and
individuals seeking more convenience. Jazz also has the
ability to offer airline operators services such as ground
handling, dispatching, flight load planning, training and
consulting.
For more information, visit www.flyjazz.ca.
SOURCE Chorus Aviation Inc., Jazz