Canada Jetlines Operations Ltd. (NEO: CJET) (“Canada Jetlines” or the “Company”) the new, all-Canadian, leisure airline, is pleased to announce that it has entered into a Loan Agreement for a $1,000,000 loan (the “Loan”) from Roosheila Group Inc. (the “Lender”). The Lender is a holding company for Reg Christian, a director of the Company and travel industry veteran. The terms of the Loan include:

  • the Loan bears interest at the rate of 7% per annum;
  • a maturity date of 24 months from the closing date;
  • principal and interest amounts are payable in equal monthly installments for the 24 month term;
  • the Lender will be issued 25,000 common shares on the date that is 12 months from the closing date and an additional 25,000 common shares on the date that is 24 months from the closing date;
  • the Lender is granted a Board nomination right for the term of the Loan; and
  • the Loan is unsecured.

The Company intends to use the net proceeds of the Loan for general corporate and working capital purposes. The closing of the transaction is subject to customary closing conditions, including the receipt of the approval of the Neo Exchange Inc.

The Lender is an affiliate of a director of the Company (Reg Christian). The Lender’s participation in the Loan is considered a related party transaction within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The related party transaction is exempt from minority approval, information circular and formal valuation requirements pursuant to the exemptions contained in Sections 5.5(a) and 5.7(1)(a) of MI 61-101, as neither the fair market value of the consideration to be issued under the transaction nor the consideration to be paid by the insiders will exceed 25% of the Company's market capitalization. The Company will not file a material change report related to this financing more than 21 days before the expected closing of the Loan as required by MI 61-101 since the details of the participation by the related parties of the Company were not settled until just prior to closing and the Company wished to close on an expedited basis for sound business reasons. The securities that will be acquired by the related parties will be acquired pursuant to an exemption from the prospectus requirement in section 2.24 of National Instrument 45-106.

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