Can someone translate this to English please

[Jacamar]

Canadian Transportation Agency approves Air Canada corporate structure

Fri Sep 3, 6:30 PM ET


OTTAWA (CP) - Air Canada moved another step closer to exiting creditor protection Friday after the Canadian Transportation Agency said the airline's new corporate structure will meet the Canadian ownership and control requirements.


"After a careful and comprehensive examination of all information and documentation filed in respect of the proposed new corporate structure of Air Canada, the agency is satisfied that the new entity, ACE Aviation Holdings, will meet the Canadian ownership and control requirements," the agency said.


Last month an Ontario court overseeing the airline approved Air Canada's restructuring plan, which will see it emerge from bankruptcy by the end of September with a smaller workforce and fleet, more international routes and plans to spin off some of its subsidiaries.


"We welcome today's decision by the Canadian Transportation Agency that allows us to meet the closing ownership conditions and proceed towards the completion of our restructuring by the end of September," said John Baker, senior vice-president and general counsel for the airline.


Under the plan, Cerberus Capital Management will hold 9.2 per cent of the airline in exchange for its $250-million investment. The New York investment firm also received the right to appoint three members of the 11 people on the ACE board of directors.


The airline's creditors will receive about 45.8 per cent of the equity in the airline for their claims of at least $8.1 billion and have a chance to buy another 42 per cent of the airline in a rights offering to be underwritten by Deutsche Bank.


Air Canada's management will get stock options for three per cent of the airline, while the airline's current shareholders will get 0.01 per cent of the equity in the new airline, or about one ACE share for every 11,894 shares they hold.


The Canadian Transportation Agency regulates various modes of transportation under federal government jurisdiction, including air, marine and rail.


Air Canada, which has been operating under creditor protection since April 1 last year, and was delisted from the Toronto stock exchange in August, has said it expects to exit creditor protection by Sept. 30.

[Rollingthunder]

Sure, business as usual, new financial structure, hopes to make a profit in the future.

[Ontariotech]

In English.....

"Man overboard...Man Overboard"

"Throw 'em a life jacket....just don't throw it at 'em....let 'em swim to it."

[Agaricus bisporus]

However...

"moved another step closer to exiting creditor protection "

is not English or anything remotely related to it. It is gobbledegook - meaningless illitereate gobbldegook.

Perhaps it is a spelling mistake, and they mean "exciting" creditor protection...Somehow I am not so hopeful...

[Bomber Harris]

Sounds like the existing shares are worthless.

So does this mean that all the shareholders loose most of their their money and someone gets to buy an operating airline on the cheap?

[FJJP]

AB - sorry, have to disagree with your comment on the phrase 'exiting creditor protection' as being gobbledegook. It actully does make sense.

'Creditor Protection', as I understand it, it is a temporary lock on financial status to prevent the unscrupulous from moving funds that could deprive creditors of any kind of return on their investment (could be credit extended for services rendered [catering, supply of spares, servicing contracts], or capital invested in return for an annual dividend, etc).

After securing some sort of re-financing deal [usually involving some sort of loss-saving compromise] to the satisfaction of all parties, the Airline can 'exit' the 'Creditor Protection' Scheme and get on with the running of the business as normal.

Perhaps the term 'Creditor Protection' should have started with Capital Letters to denote that it is part of a formal financial corporate restructure procedure.

At least, that's my limitted understanding of the system - unless there is someone out there who can correct my assumptons...

[Re-Heat]

It means that the creditors of the company have been protected by the courts until the new financial structure of the airline could be approved.

What has happened, is that since creditors come above shareholders in the rankings upon windup or liquidation, the creditors hace exchanged their loans that were owed by Air Canada for shares in the new company. Since the original Air Canada shareholders had nothing remaining to be shared amoung them, they have been awarded a nominal amount of the new company in compensation.

Essentially the creditors have got what is owed in the form of a new company, while enabling the airline to continue operations and save jobs, rather than liquidating them for the sake of gaining the cash. Fundamentally the creditors rank above shareholders as they trade with other companies expecting to take on little risk and gain their dues (per contracts) whereas the shareholders take on large amounts of risk to invest capital that - in this case - has been unwisely invested resulting in the collapse of the original company.