Maturity dates for debts totalling
$198 million are deferred from
April 2023 to April 2024
MONTRÉAL, July 29,
2022 /CNW Telbec/ - Transat
A.T. Inc. ("Transat" or the
"Corporation") announced today that it has reached an
agreement with Canada Enterprise Emergency Funding Corporation
("CEEFC"), a federal Crown corporation, to obtain $100 million in additional liquidity. In
connection with the establishment of such additional funding,
through the Large Employer Emergency Financing Facility (LEEFF),
Transat has reached an agreement with all lenders to defer the
April 2023 maturities to April 2024, as well as to defer from October 2022 to October
2023 the date by which the Corporation must meet certain
financial covenants.
Such liquidity is in addition to initial financing secured on
April 29, 2021, through LEEFF to help
the Corporation overcome the effects of the pandemic. On
March 10, 2022, Transat also received
an additional $43.3 million for
traveller refunds and negotiated favourable 20-month deferrals for
certain key terms of the unsecured LEEFF financing agreement.
As stated by Annick Guérard, President and CEO, "This
complementary financing and the changes to the existing agreements
strengthen our treasury position and reinforce our financial
resilience. This important financing milestone, combined with sales
that have been doing well in recent months, will give us the
financial flexibility to deploy our strategic plan with optimism
and confidence."
The additional credit facility made available by the Canada
Enterprise Emergency Funding Corporation, which Transat will use as
needed over the next few months, is for an amount of
$100 million of which 80% is under the terms and conditions of
the non-revolving and unsecured credit facility amended this past
March, and 20% is under the terms and conditions of the revolving
and secured credit facility.
Under the LEEFF financing, Transat issued a total of
4,687,500 warrants for the purchase of an equivalent number of
Transat shares at an exercise price of $3.20 per share over a 10-year
period1. The warrants are to vest in proportion to the
drawings that will be made, but 50% of vested warrants will be
forfeited if the loan were to be repaid in full by December 31, 2023.
The financial arrangement also provides Transat with an
additional credit facility for a maximum amount of
$50 million, subject to certain conditions that must be met no
later than July 29, 2023, including
securing additional funding from a third party. This demonstrates
the Crown corporation's renewed commitment to Transat in the
implementation of its recovery plan.
Caution regarding Forward-looking Statements
This press release contains certain forward-looking statements
with respect to Transat, including regarding the effect of the
additional liquidity on the Corporation's cash flow and the
prospects for the resumption of operations and the implementation
of the strategic plan aimed at making the Corporation profitable
again. These statements are based on certain assumptions deemed
reasonable by Transat, but are subject to certain risks and
uncertainties, several of which are beyond Transat's control, which
may cause results to differ materially.
In making these statements, the Corporation has assumed, among
other things, that travel and border restrictions imposed by
government authorities will be relaxed to allow for a resumption of
operations of the type and scale expected, that the standards and
measures imposed by government and airport authorities to ensure
the health and safety of personnel and travellers will be
consistent with those announced or currently anticipated, that
travellers will continue to travel despite the new health measures
and other constraints imposed as a result of the pandemic, that
credit facilities and other terms of credit extended by its
business partners will continue to be made available as in the
past, and that management will continue to manage changes in cash
flows to fund working capital requirements for the full fiscal
year. If these assumptions prove incorrect, actual results and
developments may differ materially from those contemplated by the
forward-looking statements contained in this press release. Risks
and uncertainties that could affect these assumptions and
forward-looking statements include those set out in the MD&A
for the fiscal year ended October 31,
2021, and for the quarter ended April
30, 2022, filed with Canadian securities commissions and
available on SEDAR at www.sedar.com.
The reader is cautioned that the foregoing list of factors is
not exhaustive of all factors that may affect any of the
Corporation's forward-looking statements. The reader is also
cautioned to consider these and other factors carefully, and not to
place undue reliance on forward-looking statements.
These statements reflect current expectations regarding future
events and operating performance, speak only as of the date this
press release is issued, and represent the Corporation's
expectations as of that date. The Corporation disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, other than as required by applicable securities
legislation.
About Transat
Founded in Montréal 35 years ago, Transat has grown to become a
travel reference worldwide, particularly as an air carrier under
the Air Transat brand. Voted four times since 2017 as the World's
Best Leisure Airline by passengers at the Skytrax World Airline
Awards, it flies to international and Canadian destinations and
strives to provide its customers with service that is enthusiastic,
friendly and entirely safe. Transat has been Travelife-certified
since 2018. As part of its commitment to a healthier environment,
it has been renewing its fleet with aircraft considered the
greenest in their category, knowing that this is essential to the
integrity of its operations and the destinations it serves (TSX:
TRZ).
www.transat.com
1 The holder
may exercise the warrants to the extent that this would not entitle
the holder to more than 19.9% of the outstanding shares and any
exercise above this threshold shall be paid in cash by the Company
based the market price of its shares.
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SOURCE Transat A.T. Inc.