Air Canada has priced both its previously announced underwritten marketed public offering of 30,800,000 Class A Variable Voting Shares and/or Class B Voting Shares of the Company at a price to the public of CA$16.25 per share, for aggregate gross proceeds of CA$500,500,000 and its concurrent marketed private placement of convertible senior unsecured notes due 2025 for aggregate gross proceeds of US$650,000,000.
The Convertible Notes will bear interest semi-annually in arrears at a rate of 4.000% per annum and will mature on July 1, 2025, unless earlier repurchased, redeemed or converted. The initial conversion rate of the Convertible Notes is 65.1337 Shares per US$1,000 principal amount of Convertible Notes, or an initial conversion price of approximately US$15.35 per Share. The Convertible Notes will be convertible into cash, Class A Variable Voting Shares and/or Class B Voting Shares of the Company or a combination thereof, at the company's election.
The company has granted the underwriters of the Share Offering an option to purchase up to an additional 15% of the Shares in the Share Offering, exercisable in whole or in part at any time until 30 days after closing of the Share Offering, and has granted the initial purchasers of the Convertible Notes Offering an option to purchase up to an additional 15% of the Convertible Notes in the Convertible Notes Offering, exercisable in whole or in part at any time until 13 days after closing of the Convertible Notes Offering.
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. (US$1.00 = CA$1.38 at time of publication.)
