In December, the company warned it might need to raise as much as $500 million to make it through 2021, absent a deal with Air Canada.
From Montreal Gazette – link to source story
Frédéric Tomesco • Feb 25, 2021
Transat A.T. Inc.’s third-largest shareholder is urging the Quebec travel company to study all scenarios in case its proposed sale to Air Canada falls through – including a possible offer by Québecor Inc. chief executive Pierre Karl Péladeau.
Air Canada and Transat each have the right to walk away from the deal after the European Commission failed to approve the transaction by a Feb. 15 deadline. Transat said last week it now expects the commission to render its decision by June 30 because regulators have requested additional information from both companies.
“Like every board of directors in a situation of this nature, Transat’s board has to give itself optionality,” Charles Emond, chief executive officer of the Caisse de dépôt et placement du Québec, told reporters in Montreal Thursday.
Transat’s board “must prepare a Plan B, instead of being subjected to Air Canada’s moods,” Emond said. “My advice to the board would be to envisage what other options are on the table in the event that Air Canada pulls its offer.”
Montreal-based Transat said last month it had received a $5-a-share offer from Péladeau’s Gestion MTRHP holding company. It dismissed the proposal, citing a lack of “binding, fully committed financing or evidence of sufficient cash on hand for the purpose of making the acquisition.”
Asked specifically about Péladeau’s offer, Emond said: “It’s probably part of the menu of options that the board should think about.”
Emond said the Caisse voted in favor of Air Canada’s revised offer in December “because it was the only offer on the table. We voted yes in the best interests of our depositors, given the company’s precarious situation.”
Air Transat’s cancelled all scheduled flights until the end of April following the federal government’s decision to temporary suspend air travel to Mexico and the Caribbean.
Transat said last week it had secured a three-month extension — to June 30 at the latest — of a $250 million loan facility arranged by Export Development Canada and National Bank of Canada. In December, the company warned it might need to raise as much as $500 million to make it through 2021, absent a deal with Air Canada.
“Time is working against Transat,” Emond said. “This is a file that we’re following very closely. Transat is an important company for Quebec.”
Christophe Hennebelle, a Transat spokesman in Montreal, declined to react to Emond’s comments on Thursday.
