Air Canada (TSX: AC) (the "Company") today announced the closing of its previously announced underwritten marketed public offering of 35,420,000 Class A Variable Voting Shares and/or Class B Voting Shares of the Company ("Shares") at a price to the public of C$16.25 per Share (the "Share Offering"), for aggregate gross proceeds of C$575,575,000, which includes the exercise in full by the underwriters of their over-allotment option to purchase up to 4,620,000 Shares for additional gross proceeds of C$75,075,000, and its concurrent marketed private placement of convertible senior unsecured notes due 2025 ("Convertible Notes") for aggregate gross proceeds of US$747,500,000 (or C$1,018,842,5001) (the "Convertible Notes Offering" and together with the Share Offering, the "Offerings"), which includes the exercise in full by the initial purchasers of their over-allotment option to purchase up to US$97,500,000 (or C$132,892,5001) principal amount of Convertible Notes.
The Company will use the net proceeds from the Offerings to supplement the Company's working capital and other general corporate purposes. The net proceeds from the Offerings will serve to increase Air Canada's cash position, thereby allowing for additional flexibility both from an operational standpoint and in the implementation of its planned mitigation and recovery measures in response to the COVID-19 pandemic.
"Coming into 2020, Air Canada enjoyed a very strong liquidity position, before the COVID-19 pandemic and government-imposed quarantines and border restrictions destroyed demand and depleted cash. This important financing will allow us to keep our strong relative position and better manage debt leverage and risk as government restrictions are lifted and the market recovers. The positive reaction from the public markets is a strong endorsement of the strength of our franchise," said Michael Rousseau, Deputy Chief Executive Officer & Chief Financial Officer of the Company.
The Shares offered in the Share Offering and the Convertible Notes and Class A Variable Voting Shares and/or Class B Voting Shares of the Company issuable upon conversion of the Convertible Notes have not been, and will not be, registered under the U.S. Securities Act of 1933 (the "Securities Act"), or any state securities laws and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the rules promulgated thereunder and applicable state securities laws.
TD Securities Inc., J.P. Morgan Securities Canada Inc. and Citigroup Global Markets Canada Inc. acted as active bookrunners for the Share Offering. J.P. Morgan Securities LLC, TD Securities Inc. and Citigroup Global Markets Canada Inc. acted as active bookrunners for the Convertible Notes Offering.