duster1
22nd Oct 2006, 22:54
Air Canada Pilots Move for Injunction
Motion to Prevent Ace Aviation From Distributing up to $2-Billion to Shareholders
TORONTO, ONTARIO--(CCNMatthews - Oct. 16, 2006) - Air Canada's pilots moved for an injunction with the Ontario Superior Court to prevent ACE Aviation Holdings Inc. from distributing up to $2-billion to shareholders until the court has had sufficient time to hear the lawsuit filed against the company Oct. 4.
"We are proceeding as planned," says Capt. Andy Wilson, president of the Air Canada Pilots Association. "Our case is strong and we are confident that the courts in Ontario will see the $2-billion distribution by ACE as unfairly disregarding the interests of creditors."
The company has until Friday, Oct. 20 to file materials with the Ontario Superior Court of Justice responding to ACPA's request for an injunction.
Capt. Wilson says last week's Quebec court proceeding on ACE's corporate arrangement was an internal mechanical step to simply allow ACE's directors to make multiple distributions without having to seek shareholder approval each time. The Quebec court did not assess whether or not the size of the distribution would have any affect on the economic future of ACE or any of its subsidiaries.
The court action filed against ACE by Air Canada's pilots under the CBCA, commonly known as the 'oppression remedy,' states that the proposed return of up to $2-billion to shareholders is oppressive and unfairly disregards the interests of Air Canada's creditors. Air Canada's pilots are creditors for the about $1-billion in pension obligations that remain outstanding following the company's emergence from insolvency in 2004 as well as for other continuing obligations.
"Air Canada has shown it can prosper. But we are concerned that if this distribution goes ahead, the company would then be on very tenuous financial footing and unable to weather a downturn in the economy," Wilson says.
Media reports this morning announced that ACE will be issuing a $200-million initial public offering (IPO) of Air Canada. Capt. Wilson says the pilots' legal and financial advisors will be studying the IPO documents once they become available.
ACPA is the largest professional pilot group in Canada, representing 3,100 pilots who operate Air Canada's mainline fleet.
MONTREAL (Reuters) - ACE Aviation Holdings Inc. (ACEa.TO: Quote) unveiled details on Monday of its plan to spin off a minority stake in Air Canada, its key operating unit and the country's top airline.
ACE said Air Canada will offer class A and B shares from treasury for gross proceeds of C$200 million, followed by a secondary offering by ACE of Air Canada shares.
ACE did not disclose the size of the offering, but said it will retain a majority interest in the airline. ACE, which had first disclosed its spinoff plans in August, said a preliminary prospectus would be filed with regulators on Monday.
Air Canada, which has some 33,000 employees and is the world's 13th-biggest airline in terms of system traffic, will use proceeds from the initial treasury offering for general corporate purposes, including funding the renewal of its fleet. It will not receive any proceeds from the secondary offering.
After the transactions, Air Canada is expected to have more than C$2 billion of cash and cash equivalents, and a C$400 million revolving credit facility, ACE said.
The spinoff is part of ACE Aviation's plan to reduce its capital by up to C$2 billion.
The syndicate of dealers is co-led by RBC Dominion Securities Inc, Citigroup Global Markets Canada Inc. and TD Securities Inc.
ACE Aviation class A shares rose 67 Canadian cents, or 1.9 percent, to C$35.77 on the Toronto Stock Exchange on Monday morning.
The stock has climbed 17 percent over the past three months as global fuel prices declined and CanJet, a privately held rival, halted scheduled service.
Shares of Canada's No. 2 carrier, WestJet Airlines Ltd. (WJA.TO: Quote), which have risen 3.6 percent over the past three months, were up 14 Canadian cents at C$11.14 on Monday.
ACE Aviation shares first began trading on October 4, 2004 when Air Canada emerged from an 18-month restructuring under bankruptcy protection. Previous shares of Air Canada became worthless under the restructuring.
ACE also warned on Monday that it expects to take a non-cash charge of C$102 million in its third quarter after raising the number of remaining Aeroplan miles expected to be redeemed under accumulations made to December 31, 2001.
The revision was made under an agreement with Aeroplan LP, in which ACE is the majority owner. Aeroplan Income Fund (AER_u.TO: Quote), which said on Monday it was increasing its cash payout by 12 percent a unit, has a minority stake in Aeroplan.
Two years tops before the small creditors, small shareholders, and the employees are hung out to dry (again) Yup-Milty, Monty and the ACE Board sure have the monopoly on ethics :DFunny didn't see much on this from Brent JANG:E
Motion to Prevent Ace Aviation From Distributing up to $2-Billion to Shareholders
TORONTO, ONTARIO--(CCNMatthews - Oct. 16, 2006) - Air Canada's pilots moved for an injunction with the Ontario Superior Court to prevent ACE Aviation Holdings Inc. from distributing up to $2-billion to shareholders until the court has had sufficient time to hear the lawsuit filed against the company Oct. 4.
"We are proceeding as planned," says Capt. Andy Wilson, president of the Air Canada Pilots Association. "Our case is strong and we are confident that the courts in Ontario will see the $2-billion distribution by ACE as unfairly disregarding the interests of creditors."
The company has until Friday, Oct. 20 to file materials with the Ontario Superior Court of Justice responding to ACPA's request for an injunction.
Capt. Wilson says last week's Quebec court proceeding on ACE's corporate arrangement was an internal mechanical step to simply allow ACE's directors to make multiple distributions without having to seek shareholder approval each time. The Quebec court did not assess whether or not the size of the distribution would have any affect on the economic future of ACE or any of its subsidiaries.
The court action filed against ACE by Air Canada's pilots under the CBCA, commonly known as the 'oppression remedy,' states that the proposed return of up to $2-billion to shareholders is oppressive and unfairly disregards the interests of Air Canada's creditors. Air Canada's pilots are creditors for the about $1-billion in pension obligations that remain outstanding following the company's emergence from insolvency in 2004 as well as for other continuing obligations.
"Air Canada has shown it can prosper. But we are concerned that if this distribution goes ahead, the company would then be on very tenuous financial footing and unable to weather a downturn in the economy," Wilson says.
Media reports this morning announced that ACE will be issuing a $200-million initial public offering (IPO) of Air Canada. Capt. Wilson says the pilots' legal and financial advisors will be studying the IPO documents once they become available.
ACPA is the largest professional pilot group in Canada, representing 3,100 pilots who operate Air Canada's mainline fleet.
MONTREAL (Reuters) - ACE Aviation Holdings Inc. (ACEa.TO: Quote) unveiled details on Monday of its plan to spin off a minority stake in Air Canada, its key operating unit and the country's top airline.
ACE said Air Canada will offer class A and B shares from treasury for gross proceeds of C$200 million, followed by a secondary offering by ACE of Air Canada shares.
ACE did not disclose the size of the offering, but said it will retain a majority interest in the airline. ACE, which had first disclosed its spinoff plans in August, said a preliminary prospectus would be filed with regulators on Monday.
Air Canada, which has some 33,000 employees and is the world's 13th-biggest airline in terms of system traffic, will use proceeds from the initial treasury offering for general corporate purposes, including funding the renewal of its fleet. It will not receive any proceeds from the secondary offering.
After the transactions, Air Canada is expected to have more than C$2 billion of cash and cash equivalents, and a C$400 million revolving credit facility, ACE said.
The spinoff is part of ACE Aviation's plan to reduce its capital by up to C$2 billion.
The syndicate of dealers is co-led by RBC Dominion Securities Inc, Citigroup Global Markets Canada Inc. and TD Securities Inc.
ACE Aviation class A shares rose 67 Canadian cents, or 1.9 percent, to C$35.77 on the Toronto Stock Exchange on Monday morning.
The stock has climbed 17 percent over the past three months as global fuel prices declined and CanJet, a privately held rival, halted scheduled service.
Shares of Canada's No. 2 carrier, WestJet Airlines Ltd. (WJA.TO: Quote), which have risen 3.6 percent over the past three months, were up 14 Canadian cents at C$11.14 on Monday.
ACE Aviation shares first began trading on October 4, 2004 when Air Canada emerged from an 18-month restructuring under bankruptcy protection. Previous shares of Air Canada became worthless under the restructuring.
ACE also warned on Monday that it expects to take a non-cash charge of C$102 million in its third quarter after raising the number of remaining Aeroplan miles expected to be redeemed under accumulations made to December 31, 2001.
The revision was made under an agreement with Aeroplan LP, in which ACE is the majority owner. Aeroplan Income Fund (AER_u.TO: Quote), which said on Monday it was increasing its cash payout by 12 percent a unit, has a minority stake in Aeroplan.
Two years tops before the small creditors, small shareholders, and the employees are hung out to dry (again) Yup-Milty, Monty and the ACE Board sure have the monopoly on ethics :DFunny didn't see much on this from Brent JANG:E