Discovery Air Inc. Announces Approval of Sale Process to Preserve Business; Affiliates of Clairvest Submit Stalking Horse Bids to Purchase Assets

Discovery Air Inc. (“Discovery”) was granted protection under the Companies’ Creditors Arrangement Act (“CCAA”) pursuant to an order (the “Initial Order”) of the Ontario Superior Court of Justice (“Court”). Pursuant to the Initial Order, KSV Kofman Inc. (“KSV”) was appointed as the CCAA monitor (“Monitor”).

On April 4, 2018, the Court granted an order (the “SSP Order”) approving a sale solicitation process (“SSP”) for the sale of Discovery’s shares of its wholly owned subsidiaries Great Slave Helicopters Ltd. (“GSH”), Air Tindi Ltd. (“ATL”) and Discovery Mining Services Ltd. (“DMS”) and its remaining minority interest in its former defence business along with certain other residual assets of Discovery. Discovery previously announced that it has entered into four asset purchase agreements with one or more affiliates of Clairvest Group Inc. (“Clairvest”) for the sales of such interests. Pursuant to the SSP Order, the asset purchase agreements were approved for the purpose of constituting “stalking horse agreements” in the SSP. Pursuant to the SSP Order, the Monitor will conduct and oversee the sale process.

Under the SSP, interested parties must submit qualified bids by no later than (a) May 21, 2018 for the shares of the former defence business with any auction to take place on May 31, 2018; and (b) June 4, 2018 for any of the shares or assets of GSH, ATL and/or DMS with any auctions to take place on June 14, 2018. It is expected that Court approval of the final transactions (the “Approval Hearing”) will be sought shortly after completion of any auctions and closing of all transactions is contemplated to occur no later than July 31, 2018. During that time GSH, ATL and DMS will continue to operate in the ordinary course.

On April 4, 2018, the Court also granted an Order approving an extension of Discovery’s stay of proceedings to and including June 29, 2018. As previously announced, although not applicants, the stay of proceedings extends to GSH, ATL and DMS to prevent creditor actions against them as a result of Discovery’s filing for CCAA protection. Discovery anticipates that it will seek a further extension of the stay at the Approval Hearing to allow the transactions to be completed.

A copy of the Initial Order, SSP Order and other Court materials and information related to the Company’s CCAA proceedings is available on the Monitor’s website at http://www.ksvadvisory.com/insolvency-cases/discovery-air/.