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Be the first with the news that moves the market- Air Canada (TSX:AC) has closed an underwritten public offer for just under C$1.6 billion in gross proceeds, after a difficult past few months for the company
- The company will use the proceeds to strength its cash position, as it implements recovery measures in response to the COVID-19 pandemic
- The onset of the pandemic and its accompanying travel bans have significantly impacted Air Canada’s operations and market performance in recent months
- In the weeks following the global outbreak, the company’s stock fell almost 75 per cent and has since only made a partial recovery
- Air Canada (AC) is up 2.32 per cent and is trading at $16.79 per share
Air Canada (TSX:AC) has closed a public offer for just under C$1.6 billion in gross proceeds, after a difficult few months for the company.
Through the offer, the company issued 35.42 million Class A and Class B shares at a price of $16.25 each, generating approximately $575.58 million in proceeds.
The offer also included a concurrent private placement, which raised an additional $1.02 billion, through convertible senior unsecured notes.
The company will use the proceeds to strength its cash position, while it implements recovery measures in response to the COVID-19 pandemic.
The onset of the pandemic and its accompanying travel bans have significantly impacted Air Canada’s operations and market performance in recent months.
Ongoing travel restrictions around the world, which began in February, have forced Air Canada to suspend the majority of its operations.
Consequently, in the weeks following the onset of the pandemic, the company’s stock fell almost 75 per cent and has since only made a partial recovery.
Deputy CEO and CFO of Air Canada, Michael Rousseau, commented on the share offer, in the context of the company’s challenging start to the year.
“Coming into 2020, Air Canada enjoyed a very strong liquidity position, before the COVID-19 pandemic and government-imposed quarantines and border restrictions destroyed demand and depleted cash.
“This important financing will allow us to keep our strong relative position and better manage debt leverage and risk as government restrictions are lifted and the market recovers,” he said.
Michael went on to say that the offer’s strong performance is indicative of the overall strength of the company’s franchise.
Air Canada (AC) is up 2.32 per cent and is trading at $16.79 per share at 10:47am EDT.
