MONTREAL — Air Canada has increased the size of a financing deal announced earlier this week to roughly $1.4 billion as it works to bolster its coffers to deal with the pandemic.
The company says the shares in the offering have been priced at $16.25 apiece. It plans to issue 30.8 million shares to raise about $500.5 million.
The airline will also issue US$650 million in convertible senior unsecured notes due in 2025, up from an initial plan for US$400 million.
The convertible notes will have an annual interest rate of four per cent and be convertible into Air Canada shares at a price of approximately US$15.35 per share.
The underwriters of the share offering have an option to purchase up to an additional 15 per cent of the shares, while initial buyers of the convertible notes will also have an option to purchase up to an additional 15 per cent.
Air Canada says it will use the cash to supplement its working capital and other general corporate purposes.
The airline said on May 4 it had $6.5 billion in unrestricted liquidity after drawing about $1 billion in March from its revolving credit facilities.
The carrier lost more than $1 billion last quarter and grounded the vast majority of its fleet as travel demand hovers near ground level while fixed costs persist, including aircraft leases, insurance and maintenance and hangar fees.
This report by The Canadian Press was first published May 28, 2020.
Companies in this story: (TSX:AC)
The Canadian Press
