/NOT FOR DISTRIBUTION IN THE
UNITED STATES OR OVER UNITED
STATES WIRE SERVICES/
HALIFAX,
NS, Dec. 9, 2024 /CNW/ - Chorus Aviation
Inc. (TSX: CHR) ("Chorus" or the "Company")
today announced its plan to repay its corporate financings to help
optimize the Company's capital structure, following the closing of
the sale of Chorus' Regional Aircraft Leasing segment (the
"Transaction") on December 6,
2024. As previously announced, Chorus intends to use the net
proceeds from the Transaction to repay at maturity, redeem or
repurchase the Company's corporate financings, including the
outstanding 5.75% Senior Unsecured Debentures due December 31, 2024 (the "Series A
Debentures"), 6.00% Convertible Senior Unsecured Debentures due
June 30, 2026 (the "Series B
Debentures"), 5.75% Senior Unsecured Debentures due
June 30, 2027 (the "Series C
Debentures") and the Series 1 Preferred Shares in the capital
of the Company (the "Series 1 Preferred Shares").
"Following the recent closing of the RAL segment sale, we are
now executing on our previously announced plan to deleverage the
Company's balance sheet," said Colin
Copp, President and Chief Executive Officer, Chorus. "This
is an important milestone, as we reposition Chorus for a stronger
future."
Change of Control Offers
Chorus will issue today a notice of change of control under the
indentures governing the Series B Debentures (C$72.5 million aggregate principal amount) and
Series C Debentures (C$85.0
million aggregate principal amount) (the Series B Debentures
and Series C Debentures referred to collectively as, the
"Debentures") and commence offers to purchase (collectively,
the "Change of Control Offers") all of the
outstanding aggregate principal amount of Debentures at a
price equal to: (i) in the case of the Series B Debentures, 100% of
the principal amount thereof repurchased, and (ii) in the case of
the Series C Debentures, 101% of the principal amount thereof
repurchased, plus, in each case, accrued and unpaid interest, if
any on such Debentures up to but excluding February 3, 2025, the date of purchase.
Each Change of Control Offer is open for acceptance by the
holders of the Debentures until 5:00
p.m. (Toronto time) on
January 27, 2025 (the "Expiry
Time").
If 90% or more of the aggregate principal amount of the
outstanding Series B Debentures or the Series C Debentures have
been tendered for purchase on or prior to the Expiry Time, Chorus
will have the right to redeem all of the remaining outstanding
Series B Debentures or the Series C Debentures, as applicable, in
accordance with the terms of the indentures governing the
Debentures. If Chorus elects to exercise such right in respect of
either series of Debentures, Chorus intends to apply to the TSX to
delist such series.
If Chorus does not acquire all of the Debentures pursuant to the
Change of Control Offers and related redemption rights, the
unpurchased Debentures will remain outstanding. Chorus will, in
addition to other redemption rights set out in the relevant
indentures, retain the ability to redeem any remaining Series B
Debentures at any time on and after June 30,
2025 at the principal amount plus accrued and unpaid
interest thereon and the Series C Debentures at any time on and
after March 31, 2026 at the principal
amount plus accrued and unpaid interest thereon.
For additional details regarding the terms and conditions of the
Change of Control Offers and the redemption of the Debentures,
please refer to the notice of change of control and offer to
purchase, which has been mailed to the registered holders of the
Debentures, and which is available under Chorus' SEDAR+ profile at
www.sedarplus.ca.
None of Chorus, the board of directors of Chorus, nor any of
their respective representatives thereof makes any recommendation
with respect to whether Debentureholders should tender or deposit
their Debentures pursuant to the Change of Control Offers. Each
Debentureholder must make the decision whether to tender or deposit
Debentures under the applicable Change of Control Offer based on
their particular circumstances. Debentureholders are urged to
carefully evaluate all information regarding the Debentures and the
Change of Control Offers and to consult their own investment,
legal, financial, tax and other professional advisors and to make
their own decision whether to tender or deposit their
Debentures.
Maturity of Series A Debentures
As of December 6, 2024, there was
C$86.2 million aggregate principal
amount of Series A Debentures outstanding. The Series A Debentures
will mature in accordance with the terms of the indenture governing
the Series A Debentures on December 31,
2024 and will be delisted at the close of trading on
December 31, 2024.
Redemption of Series 1 Preferred Shares
Chorus also announced today that it will redeem all of its
issued and outstanding Series 1 Preferred Shares on December 31, 2024, in accordance with their
terms. There are currently 300,000 Series 1 Preferred Shares issued
and outstanding. The Series 1 Preferred Shares will be redeemed at
a price of approximately US $1,210.90
per share for an aggregate redemption price of US $363,270,833. Formal notice of the redemption has
been delivered to the holders of the Series 1 Preferred Shares.
Forward-Looking Information
This news release contains forward-looking information and
statements within the meaning of applicable securities laws
(collectively, "forward-looking information"). Examples of
forward-looking information in this news release include statements
and expectations regarding the Change of Control Offers, the
maturing of the Series A Debentures, the redemption of Series 1
Preferred Shares and the anticipated improvements in Chorus'
financial condition. Forward-looking information involves
significant risks and uncertainties that could cause actual results
to differ materially from those anticipated, including, but not
limited to, the level of take up under the Change of Control
Offers, the potential impact of the completion of the Transaction
on relationships, including with employees, suppliers, customers,
investors and other providers of capital; changes in the aviation
industry and general economic conditions; the emergence of disputes
under the Capacity Purchase Agreement between Chorus' subsidiary,
Jazz Aviation LP, and Air Canada; a deterioration in Air Canada's
financial condition; any default by Chorus under debt covenants;
asset impairments; and changes in law. Actual results could
differ materially from those described in forward-looking
information due to known or unknown risks, including, but not
limited to, the risk factors described in Chorus' public disclosure
record available under Chorus' profile on SEDAR+ at
www.sedarplus.ca.
The forward-looking information contained in this news release
represents Chorus' expectations as of the date of this news release
(or as of the date they are otherwise stated to be made) and is
subject to change after such date. Chorus disclaims any intention
or obligation to update or revise any forward-looking information
as a result of new information, subsequent events or otherwise,
except as required by applicable securities laws. Readers are
cautioned that the foregoing factors and risks are not
exhaustive.
About Chorus Aviation Inc.
Chorus is a Canadian company focused on aviation services
businesses. Our operating subsidiaries are: Jazz Aviation, the
largest regional operator in Canada and provider of regional air services
under the Air Canada Express brand; Voyageur Aviation, a leading
provider of specialty charter, aircraft modifications, parts
provisioning and in-service support services; and Cygnet Aviation
Academy, an industry leading accredited training academy preparing
pilots for direct entry into airlines. Together, Chorus'
subsidiaries provide services that encompass every stage of an
aircraft's lifecycle, including: aircraft acquisition and leasing;
aircraft refurbishment, engineering, modification, repurposing and
transition; contract flying; aircraft and component maintenance,
disassembly, and parts provisioning; and pilot training.
Chorus Class A Variable Voting Shares and Class B Voting Shares
trade on the Toronto Stock Exchange under the trading symbol 'CHR'.
Chorus 5.75% Senior Unsecured Debentures due December 31, 2024, 6.00% Convertible Senior
Unsecured Debentures due June 30,
2026, and 5.75% Senior Unsecured Debentures due June 30, 2027 trade on the Toronto Stock Exchange
under the trading symbols 'CHR.DB.A', 'CHR.DB.B', and 'CHR.DB.C'
respectively. For further information on Chorus, please visit
www.chorusaviation.com.
SOURCE Chorus Aviation Inc.