• Expands and broadens Chorus’ business to include an established and growing asset management platform with an excellent track record
• Enhances and diversifies future cash flows with a shift to an asset light model
• Differentiated model benefits all stakeholders
• Creates a leading regional aircraft lessor with best-in-class regional aviation management team
• Establishes partnership with Brookfield as a strategic cornerstone investor in Chorus

HALIFAX, NS, February 27, 2022 – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) announced today that it has entered into a sale and purchase agreement (the ‘SPA’) pursuant to which one or more wholly-owned subsidiaries of Chorus will acquire Falko Regional Aircraft Limited (‘Falko’), a leading regional aircraft lessor, together with (i) affiliates of Falko, and (ii) the equity interests in certain entities and aircraft which are ultimately owned by funds managed by Fortress Investment Group LLC ('Fortress') and managed by Falko (or one of its affiliates). The total consideration for the transaction is approximately US$855 million comprised of (a) US$445 million of cash consideration (inclusive of agreed adjustments)2, and (b) approximately US$410 million of existing indebtedness that will remain with the relevant target entities. The transaction includes Falko’s asset management platform and Fortress' equity interests in 1263 owned and managed regional aircraft and will create new opportunities for growth and a differentiated business model to maximize returns on aircraft assets. The combined company will have a total of 353 owned, operated, and managed regional aircraft. Upon closing, Chorus anticipates having 32 airline customers in 23 countries.

Brookfield, through its Special Investments program (‘BSI’), and together with institutional partners, has agreed to make a strategic equity investment in Chorus in connection with the transaction. Conditional upon closing the acquisition, Brookfield will invest US$374 million in Chorus, including US$300 million of preferred equity4 and US$74 million of common equity. The preferred equity will be non-convertible and will initially pay a dividend of 8.75% annually in cash, or 9.5% in kind, at Chorus’ option, with step-ups after the sixth anniversary5. Chorus will issue 25,400,000 common shares6 at CA$3.70 per share, representing 12.5% of the pro forma issued and outstanding common shares and an approximate 8% premium to the 30-day VWAP of Chorus’ shares as of January 28, 20227, and 18,642,772 common share purchase warrants with an exercise price of CA$4.608 per share, representing an approximate 35% premium to the 30-day VWAP of Chorus’ shares as of January 28, 2027.

Upon closing the transaction, Chorus will enter into an investor rights agreement with Brookfield providing for, among other things, registration rights, standstill and transfer restrictions and the right to nominate two directors to Chorus’ Board of Directors. Upon closing the transaction, Brookfield will nominate David Levenson and Frank Yu to Chorus’ Board of Directors.

The acquisition transaction and the private placement to Brookfield are subject to applicable regulatory approvals and customary completion requirements, and are expected to close in the second quarter of 2022.

“The acquisition of Falko is transformative for Chorus, creating a world premier full-service provider in regional aviation,” stated Joe Randell, President and Chief Executive Officer, Chorus. “We are extremely pleased to have Brookfield, a well-respected company with global reach, as our strategic cornerstone investor, bringing extensive experience in asset management, fundraising and capital markets. The equity investment is an important endorsement of our strategy and simultaneously reduces leverage9. Brookfield’s significant financial strength and transaction expertise provides Chorus with increased stability and support to execute on our strategy to the benefit of all stakeholders. The size and scale of the newly combined entity broadens and enhances market opportunities. Growth through this established asset management platform meaningfully changes Chorus’ risk profile in terms of debt levels, residual value asset risk, and enhanced earnings stability and diversity. This transaction will be accretive10 to earnings and earnings per share in the first year.”

“We are very excited about this transaction as it combines two highly experienced platforms with complementary aircraft portfolios and diversified, high-quality customers worldwide,” said Jeremy Barnes, Chief Executive Officer, Falko. “Regional aircraft serve a critical role for airlines around the world and the growth trajectory is strong. In an increasingly competitive environment, together we’re better able to effectively address the needs of our customers and provide them with a larger scale of fleet solutions. Chorus’ technical skills and capabilities will help maximize asset returns for the benefit of shareholders and fund investors. This transaction caps over a decade of growth and success under the sponsorship of Fortress. We are grateful for the resources, expertise and partnership that Fortress provided as we built Falko into a truly best-in-class platform in a competitive industry, and we now look forward to an exciting next phase of success as part of Chorus.”

“We are pleased to partner with Chorus on the acquisition of Falko, which enables the combined company to execute on its asset-light strategy and benefit from the recovery in the aviation sector,” commented Angelo Rufino, Managing Partner and Head of Americas for BSI. “This investment is another example of how Brookfield partners with companies to originate flexible capital solutions to help them achieve their strategic goals,” said David Levenson, Managing Partner and Global Head of BSI.

Advisors

Deutsche Bank Securities Inc. is the exclusive financial advisor to Chorus. Dentons UK and Middle East LLP is the legal advisor to Chorus in connection with the acquisition transaction, and Osler, Hoskin & Harcourt LLP is the legal advisor to Chorus in connection with the private placement.