Latest news with #LEEFF
Cision Canada
10 hours ago
- Business
- Cision Canada
Clarification by Transat A.T. Inc. following injunction application by Financière Outremont Inc. Français
MONTREAL, June 27, 2025 /CNW/ - Transat A.T. Inc. ("Transat" or the "Corporation") announces that on June 27, 2025, it was served with an application for an interlocutory injunction and permanent injunction (the "Injunction Application") from Financière Outremont Inc. ("Financière Outremont"), a company controlled by Mr. Pierre Karl Péladeau, in connection with the announcement of the agreement in principle published on June 5, 2025, with Canada Enterprise Emergency Funding Corporation ("CEEFC") regarding the restructuring of the debt incurred by Transat under the Large Employer Emergency Funding Facility (LEEFF) program managed by CEEFC during the COVID-19 pandemic (the "Transaction"). Since the announcement of the agreement in principle, the Corporation's share price has increased from $1.64 at market close on June 4, 2025, to $2.83 at market close on June 27, 2025, representing a 72% increase. As a reminder, upon completion of the Transaction, the outstanding debt with CEEFC will be written-off by nearly 50%, from $772M as at March 31, 2025, to $334M as follows: Repayment of $41.4M in cash to CEEFC Credit facilities reduced to a single credit facility of $175M Issuance to CEEFC of a $158,735,045 debenture maturing in 10 years Issuance to CEEFC of non-voting preferred shares convertible into Class B Voting Shares valued at $16,264,955 (the "Preferred Shares") Extension of the expiry of the 13,000,000 existing warrants (the "Warrants") to April 29, 2035 At no time will the exercise of Warrants or conversion of Preferred Shares result in CEEFC beneficially owning more than 19.9% of the common shares, and therefore, CEEFC will not exert control over the Corporation. The Injunction Application by Financière Outremont aims in particular to prevent the closing of the Transaction, beneficial for the Corporation, unless the Corporation obtains shareholder approval, which the Corporation deems not required. In this regard, the Corporation reiterates that it has rightfully relied on the formal valuation and minority approval exemptions contained in sections 5.5(g) and 5.7(1)(e) of Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions, given that the Transaction significantly strengthens the financial position of the issuer, which was becoming extremely precarious due to the size of its debt, as repeatedly disclosed in the Corporation's public filings. The Corporation believes the allegations made by Financière Outremont are unfounded and intends to contest them vigorously and seek dismissal of the Injunction Application. This application does not affect the Corporation's operations. The Corporation recalls that the announced Transaction is the result of discussions initiated over 18 months ago with CEEFC and the review of a range of alternatives conducted through a robust process with the assistance of a special advisory committee of the Board of Directors composed solely of independent directors, with a view to establishing an optimal long-term capital structure for the Corporation. The Transaction was unanimously approved by the Board of Directors on the recommendation of the special committee, which completed its work with the assistance of external financial and legal advisors. The usual conditional approval of the Toronto Stock Exchange was obtained regarding the Preferred Shares component. The Transaction is subject to the finalization of definitive agreements. The Corporation does not intend to comment further on the Injunction Application out of respect for the ongoing judicial process unless circumstances warrant otherwise. For more details on the Transaction, please refer to the press release issued by the Corporation on June 5, 2025, available on SEDAR+ at Caution Regarding Forward-Looking Information This news release contains certain forward-looking statements with respect to the Corporation. These forward-looking statements are identified by the use of terms and phrases such as "anticipate" "believe" "could" "estimate" "expect" "intend" "may" "plan" "potential" "predict" "project" "will" "would", the negative of these terms and similar terminology, including references to assumptions. All such statements are made pursuant to applicable Canadian securities legislation. Such statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. The forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, economic conditions, changes in demand due to the seasonal nature of the business, extreme weather conditions, climatic or geological disasters, war, political instability, measures taken, planned or contemplated by governments regarding the imposition of tariffs on exports and imports, real or perceived terrorism, outbreaks of epidemics or disease, consumer preferences and consumer habits, consumers' perceptions of the safety of destination services and aviation safety, demographic trends, disruptions to the air traffic control system, the cost of protective, safety and environmental measures, competition, maintain and grow its reputation and brand, the availability of funding in the future, the Corporation's ability to repay its debt from internally generated funds or otherwise, the Corporation's ability to adequately mitigate the Pratt & Whitney GTF engine issues, fluctuations in fuel prices and exchange rates and interest rates, the Corporation's dependence on key suppliers, the availability and fluctuation of costs related to our aircraft, information technology and telecommunications, cybersecurity risks, changes in legislation, regulatory developments or procedures, pending litigation and third-party lawsuits, the ability to reduce operating costs through the Elevation program initiatives, among other things, the Corporation's ability to attract and retain skilled resources, labour relations, collective bargaining and labour disputes, pension issues, maintaining insurance coverage at favourable levels and conditions and at an acceptable cost, and other risks detailed in the Risks and Uncertainties section of the MD&A included in our 2024 Annual Report. The reader is cautioned that the foregoing list of factors is not exhaustive of the factors that may affect any of the Corporation's forward-looking statements. The reader is also cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements. The Corporation considers that the assumptions on which these forward-looking statements are based are reasonable. These statements reflect current expectations regarding future events and operating performance, speak only as of the date this news release is issued, and represent the Corporation's expectations as of that date. For additional information with respect to these and other factors, see the MD&A for the quarter ended April 30, 2025 filed with the Canadian securities commissions and available on SEDAR+ at The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable securities legislation. About Transat A.T. Inc. Media site: Financial analysts: Jean-François Pruneau Chief Financial Officer [email protected] SOURCE Transat A.T. Inc.
Cision Canada
15 hours ago
- Business
- Cision Canada
The proposed debt restructuring of Transat A.T. inc. through CEEFC is contrary to the interests of the Corporation's shareholders and must be put to them for approval Français
On behalf of Financière Outremont inc., Pierre Karl Péladeau is asking the Québec Superior Court to intervene, in the absence of formal shareholder approval, and prevent the transfer of control of the Corporation to the federal government. MONTRÉAL, June 27, 2025 /CNW/ - While Transat A.T. inc. announced on June 5, 2025 that it had reached an agreement in principle with the Canada Enterprise Emergency Funding Corporation (CEEFC), a federal government agency, for the restructuring of the debt incurred by Transat A.T. inc. (the Corporation) under the Large Employer Emergency Financing Facility (LEEFF) program managed by CEEFC in the context of the COVID-19 pandemic, no official announcement has been sent to the Corporation's shareholders to inform them of the agreement. This constitutes a violation of their rights and the Corporation's obligations. As one of Transat A.T. inc.'s largest shareholders, Pierre Karl Péladeau believes that this agreement should not only be presented to shareholders, as it is of decisive importance to the Corporation's financial viability and future, but most importantly approved by a shareholder vote in accordance with basic principles of corporate governance and shareholders' ownership rights. For this reason, Pierre Karl Péladeau, on behalf of Financière Outremont inc. is compelled to ask the Superior Court to intervene before it is too late and order the Corporation not to finalize and not to close the agreement in principle before it has been approved by a shareholder vote. It is unjust and unwarranted for the Corporation to dilute its shareholders' equity without shareholder approval through a restructuring operation that ultimately does not ensure the Corporation's long-term viability, when other options are not only available but have been presented to the Corporation's Board of Directors, in accordance with the process initiated several months ago. To justify its decision to disregard its regulatory obligation to submit to its shareholders a financial transaction that is so dramatically detrimental to them, the Board of Directors of Transat A.T. Inc. states that " the transaction improves the financial position of the Corporation, which was becoming extremely precarious due to the size of its debt and maturity" and that it is "the result of discussions initiated by the Corporation over 18 months ago with CEEFC" (Corporation press release, June 5, 2025). No publicly disclosed market information suggests that the Corporation is currently insolvent or in serious financial difficulty, or that its continued operation is in doubt. The Corporation's last release was on June 12 and considerations of such import were not disclosed to the markets or shareholders in any way. Transat A. T. inc. therefore appears to be structuring the transaction in such a way as to take undue advantage of a regulatory exemption to the detriment of its shareholders' rights, when no emergency has been disclosed to the public or to shareholders that would justify flouting their rights in this way, and when it would have been easy to respect those rights by holding a proper vote. The result of the unilateral restructuring of the Corporation's debt will be to transfer control of the Corporation to the federal government, which is the Corporation's principal creditor, as well as its largest potential shareholder and the regulator of its operations. This is not in the best interests of the citizens and taxpayers of Canada and Québec. Based on the limited information available about the agreements between the Corporation and the government, the government would be able to lay its hands on any cash available or raised as it sees fit. These terms and conditions therefore grant the government de facto control of the Corporation and are not in the interests of the other shareholders.
Cision Canada
12-06-2025
- Business
- Cision Canada
Transat A.T. Inc. Reports Results for the Second Quarter of Fiscal 2025
Second-quarter highlights: Revenues of $1,031.1 million, up 5.9% from $973.2 million last year Adjusted EBITDA 1 of $98.4 million, compared to $30.2 million last year Net loss of $22.9 million ($0.58 per share), compared to a net loss of $54.4 million ($1.40 per share) last year Free cash flow 1 of $142.3 million, compared to $109.8 million last year Cash and cash equivalents of $532.6 million as at April 30, 2025 Elevation optimization Program initiatives implemented to date are expected to deliver an annualized adjusted EBITDA 1 run-rate of $67.0 million Reached an agreement in principle for the restructuring of the LEEFF debt incurred in connection with the COVID-19 pandemic MONTRÉAL, June 12, 2025 /CNW/ - Transat A.T. Inc. today reported its second quarter 2025 financial results. "Transat delivered improved operating and financial performances in the second quarter of fiscal 2025, building on the positive momentum that began in the fourth quarter of 2024. During the second quarter, revenue grew 5.9%, driven by a 2.0% year-over-year yield improvement and a 1.6% passenger traffic increase. Tight control of operating expenses led to productivity gains, while lower fuel costs further supported performance, resulting in adjusted EBITDA of $98.4 million. Despite persistent economic uncertainty, Transat is methodically executing its business strategy through disciplined fleet optimization and network expansion. Recent additions of new routes and changes to our program have further strengthened our leadership in providing leisure travel services to Canadian consumers," said Annick Guérard, President and Chief Executive Officer of Transat. "We are making significant progress through our Elevation Program, a comprehensive optimization plan aimed at maximizing long-term profitable growth. The initiatives implemented to date are expected to generate an annualized adjusted EBITDA run rate of $67 million and we remain on track to reach our goal of $100 million. Our teams are fully committed to successfully executing the plan and we expect to benefit directly from cost-saving and revenue-generating initiatives beginning in the second half of the current year," added Ms. Guérard. "We are pleased to have reached a refinancing agreement with our main lender. This represents a major milestone, as it significantly reduces our debt, strengthens our balance sheet, and positions Transat to further implement its long-term strategic plan. In addition, we have reached a new compensation agreement with the manufacturer of the GTF 2 engines for the 2025 and 2026 fiscal years, partially recorded during the second quarter as non-cash revenue. We are currently evaluating opportunities to monetize this financial compensation," said Jean-François Pruneau, Chief Financial Officer of Transat. For the quarter ended April 30, 2025, revenues reached $1,031.1 million, up 5.9% from $973.2 million in the corresponding period last year. The increase was mainly attributable to a 2.0% increase in airline unit revenues (yield) and a 1.6% increase in traffic expressed in revenue-passenger-miles (RPM) compared with 2024. Reflecting disciplined management, the Corporation's capacity was up 2.6% from the corresponding period last year, while capacity for sun routes, the main program during this period, remained stable. In addition, following the agreement entered into with the original equipment manufacturer of the GTF 2 engines, a financial compensation of $20.0 million was recorded in revenues. Adjusted EBITDA 1 amounted to $98.4 million, compared with $30.2 million in 2024. This increase was mainly attributable to higher revenues, increased productivity, as well as a 18% decrease in fuel prices compared with the corresponding period of 2024. Six-month results For the six-month period ended April 30, 2025, revenues reached $1,860.6 million, up 5.8% from $1,758.7 million in the corresponding period a year ago. For the six-month period, network-wide capacity increased by 1.6% compared with 2024, while capacity for sun routes, the main program during this period, increased by 0.5%. Overall, traffic was 1.3% higher than in 2024. The revenue increase also reflects the financial compensation noted above. For the six-month period, adjusted EBITDA 1 totaled $118.4 million, compared with $26.8 million for fiscal 2024. The increase was mainly attributable to revenue growth, productivity gains and lower fuel prices. Cash flow and financial position Cash flow related to operating activities amounted to $207.8 million during the second quarter of 2025, compared with $183.2 million for the same period last year, mainly due to higher net income before non-cash operating items this year versus last. After accounting for investing activities and repayment of lease liabilities, free cash flow 1 reached $142.3 million during the quarter, compared with $109.8 million for the corresponding period last year. As at April 30, 2025, cash and cash equivalents stood at $532.6 million, compared to $260.3 million as at October 31, 2024. Cash and cash equivalents in trust or otherwise reserved mainly resulting from travel package bookings totaled $295.6 million as at April 30, 2025, compared with $484.9 million as at October 31, 2024, reflecting the seasonal nature of operations. Customers deposits for future travel totaled $888.7 million as at April 30, 2025, comparable to the amount recorded a year earlier. During the six-month period ended April 30, 2025 the Corporation received net proceeds of $30.6 million from the final of the four previously announced spare engine sale-leaseback transactions, completed in early November. Long-term debt and deferred government grant totaled $812.2 million as at April 30, 2025, compared to $803.1 million as at October 31, 2024. Reflecting the proceeds mentioned above and the change in cash, the amount net of cash stood at $279.6 million, down from $542.7 million as at October 31, 2024. Event after the reporting period On June 5, 2025, the Corporation announced that it had reached an agreement in principle with the Canada Enterprise Emergency Funding Corporation (CEEFC) for the restructuring of all its debt contracted under the Large Employer Emergency Financing Facility (LEEFF), managed by the CEEFC. As of April 30, 2025, this debt had a principal amount of $773.4 million and a carrying value of $762.2 million, including the deferred government grant amount. Following the transaction, outstanding debt with CEEFC is expected to decrease from $773.4 million to $333.7 million. Key indicators To date, load factors for the summer period, which consists of the third and fourth quarters, are 1.2 percentage points lower compared to the same date in fiscal 2024, while airline unit revenues, expressed as yield, are 1.7% higher than they were at this time last year. For fiscal year 2025, the Corporation expects an available capacity increase of 1.0%, measured in available seat-miles, compared to 2024. Conference call The second quarter 2025 conference call will take place on Thursday, June 12, 2025, 10:00 a.m. To join the conference call without operator assistance, you may register by entering your phone number here to receive an instant automated call back. You can also dial direct to be entered into the call by an operator: Montreal: 514 400-3794 North America (toll-free): 1 800 990-4777 Name of conference: Transat The conference will also be accessible live via webcast: click here to register. An audio replay will be available until June 19, 2025, by dialing 1 888 660-6345 (toll-free in North America), access code 91901 followed by the pound key (#). The webcast will remain available for 90 days following the call. Third-quarter 2025 results will be announced on September 11, 2025. (1) Non-IFRS financial measures Transat prepares its financial statements in accordance with International Financial Reporting Standards ["IFRS"]. We will occasionally refer to non-IFRS financial measures in the news release. These non-IFRS financial measures do not have any meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. They are intended to provide additional information and should not be considered as a substitute for measures of performance prepared in accordance with IFRS. All dollar figures are in Canadian dollars unless otherwise indicated. The following are non-IFRS financial measures used by management as indicators to evaluate ongoing and recurring operational performance. Adjusted operating income (loss) or adjusted EBITDA: Operating income (loss) before depreciation, amortization and asset impairment expense, reversal of impairment of the investment in a joint venture, the effect of changes in discount rates used for accretion of the provision for return conditions, restructuring and transaction costs and other significant unusual items, and including premiums related to derivatives that matured during the period. The Corporation uses this measure to assess the operational performance of its activities before the aforementioned items to ensure better comparability of financial results. Adjusted operating income is also used to calculate variable compensation for employees and senior executives. Adjusted pre-tax income (loss) or adjusted EBT: Income (loss) before income tax expense before change in fair value of derivatives, revaluation of liability related to warrants, gain (loss) on long-term debt modification, gain (loss) on business disposals, gain on disposal of investment, gain (loss) on asset disposals, gain on sale and leaseback of assets, the effect of changes in discount rates used for accretion of the provision for return conditions, restructuring and transaction costs, write-off of assets, reversal of impairment of the investment in a joint venture, foreign exchange gain (loss) and other significant unusual items, and including premiums related to derivatives that matured during the period. The Corporation uses this measure to assess the financial performance of its activities before the aforementioned items to ensure better comparability of financial results. Adjusted net income (loss): Net income (loss) before change in fair value of derivatives, revaluation of liability related to warrants, gain (loss) on long-term debt modification, gain (loss) on business disposals, gain on disposal of investment, gain (loss) on asset disposals, gain on sale and leaseback of assets, the effect of changes in discount rates used for accretion of the provision for return conditions, restructuring and transaction costs, write-off of assets, reversal of impairment of the investment in a joint venture, foreign exchange gain (loss), reduction in the carrying amount of deferred tax assets and other significant unusual items, and including premiums related to derivatives that matured during the period, net of related taxes. The Corporation uses this measure to assess the financial performance of its activities before the aforementioned items to ensure better comparability of financial results. Adjusted net income (loss) is also used in calculating the variable compensation of employees and senior executives. Adjusted net earnings (loss) per share: Adjusted net income (loss) divided by the adjusted weighted average number of outstanding shares used in computing diluted earnings (loss) per share. Free cash flow: Cash flows related to operating activities less cash flows related to investing activities and repayment of lease liabilities. The Corporation uses this measure to assess the cash that's available to be distributed in a discretionary way such as repayment of long-term debt or deferred government grant or distribution of dividend to shareholders. Total debt: Long-term debt plus lease liabilities, deferred government grant and liability related to warrants, net of deferred financing costs related to the subordinated debt - LEEFF. Management uses total debt to assess the Corporation's debt level, future cash needs and financial leverage ratio. Management believes this measure is useful in assessing the Corporation's capacity to meet its current and future financial obligations. Total net debt: Total debt (described above) less cash and cash equivalents. Total net debt is used to assess the cash position relative to the Corporation's debt level. Management believes this measure is useful in assessing the Corporation's capacity to meet its current and future financial obligations. The results were affected by non-operating items, as summarized in the following table: Highlights and non-IFRS financial measures Second quarter First six-month period 2025 2024 2025 2024 (in thousands of Canadian dollars, except per share amounts) $ $ $ $ Operating income (loss) 37,270 (15,161) (14,686) (67,590) Depreciation and amortization 62,680 54,748 125,645 104,912 Reversal of impairment of the investment in a joint venture — — — (3,112) Effect of discount rate changes (887) (7,485) 6,262 (2,210) Restructuring costs 979 1,911 4,057 1,977 Premiums related to derivatives that matured during the period (1,596) (3,863) (2,863) (7,177) Adjusted operating income¹ or adjusted EBITDA¹ 98,446 30,150 118,415 26,800 Net loss (22,884) (54,387) (145,416) (115,364) Reversal of impairment of the investment in a joint venture — — — (3,112) Effect of discount rate changes (887) (7,485) 6,262 (2,210) Restructuring costs 979 1,911 4,057 1,977 Gain on asset disposals — — (5,183) (5,784) Change in fair value of derivatives 92,241 (4,978) 88,779 17,181 Revaluation of liability related to warrants (2,119) (6,236) (2,126) 5,511 Foreign exchange (gain) loss (60,999) 28,170 (13,527) (13,957) Gain on long-term debt modification — — (216) — Premiums related to derivatives that matured during the period (1,596) (3,863) (2,863) (7,177) Adjusted net income (loss)¹ 4,735 (46,868) (70,233) (122,935) Adjusted net income (loss)¹ 4,735 (46,868) (70,233) (122,935) Adjusted weighted average number of outstanding shares used in computing diluted earnings per share 39,752 38,713 39,607 38,645 Adjusted net earnings (loss) per share¹ 0.12 (1.21) (1.77) (3.18) Cash flows related to operating activities 207,842 183,216 376,420 293,918 Cash flows related to investing activities (19,312) (31,247) (11,578) (59,992) Repayment of lease liabilities (46,251) (42,184) (93,434) (85,048) Free cash flow 1 142,279 109,785 271,408 148,878 As at April 30, 2025 As at October 31, 2024 (in thousands of dollars) $ $ Long-term debt 705,562 682,295 Deferred government grant 106,626 120,784 Liability related to warrants 6,393 8,519 Lease liabilities 1,369,221 1,465,722 Total debt 1 2,187,802 2,277,320 Total debt 2,187,802 2,277,320 Cash and cash equivalents (532,611) (260,336) Total net debt 1 1,655,191 2,016,984 About Transat Founded in Montreal 37 years ago, Transat has achieved worldwide recognition as a provider of leisure travel particularly as an airline under the Air Transat brand. Voted World's Best Leisure Airline by passengers at the 2024 Skytrax World Airline Awards, it flies to international destinations. By renewing its fleet with the most energy-efficient aircraft in their category, it is committed to a healthier environment, knowing that this is essential to its operations and the destinations it serves. Based in Montreal, Transat has 5,000 employees with a common purpose to bring people closer together. (TSX: TRZ) Caution regarding forward-looking statements This news release contains certain forward-looking statements with respect to the Corporation, including those regarding its results, its financial position and its outlook for the future. These forward-looking statements are identified by the use of terms and phrases such as "anticipate" "believe" "could" "estimate" "expect" "intend" "may" "plan" "potential" "predict" "project" "will" "would", the negative of these terms and similar terminology, including references to assumptions. All such statements are made pursuant to applicable Canadian securities legislation. Such statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. The forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, economic conditions, changes in demand due to the seasonal nature of the business, extreme weather conditions, climatic or geological disasters, war, political instability, measures taken, planned or contemplated by governments regarding the imposition of tariffs on exports and imports, real or perceived terrorism, outbreaks of epidemics or disease, consumer preferences and consumer habits, consumers' perceptions of the safety of destination services and aviation safety, demographic trends, disruptions to the air traffic control system, the cost of protective, safety and environmental measures, competition, maintain and grow its reputation and brand, the availability of funding in the future, the Corporation's ability to repay its debt from internally generated funds or otherwise, the Corporation's ability to adequately mitigate the Pratt & Whitney GTF engine issues, fluctuations in fuel prices and exchange rates and interest rates, the Corporation's dependence on key suppliers, the availability and fluctuation of costs related to our aircraft, information technology and telecommunications, cybersecurity risks, changes in legislation, regulatory developments or procedures, pending litigation and third-party lawsuits, the ability to reduce operating costs through the Elevation program initiatives, among other things, the Corporation's ability to attract and retain skilled resources, labour relations, collective bargaining and labour disputes, pension issues, maintaining insurance coverage at favourable levels and conditions and at an acceptable cost, and other risks detailed in the Risks and Uncertainties section of the MD&A included in our 2024 Annual Report. The reader is cautioned that the foregoing list of factors is not exhaustive of the factors that may affect any of the Corporation's forward-looking statements. The reader is also cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements. The forward-looking statements in this news release are based on a number of assumptions relating to economic and market conditions as well as the Corporation's operations, financial position and transactions. Examples of such forward-looking statements include, but are not limited to, statements concerning: The outlook whereby the Corporation will be able to meet its obligations with cash on hand, cash flows from operations, drawdowns under existing or other credit facilities. The outlook whereby, for fiscal year 2025, the Corporation expects an available capacity increase of 1.0%, measured in available seat-miles, compared to 2024. The outlook whereby the initiatives implemented to date are expected to generate an annualized adjusted EBITDA run rate of $67 million and the Corporation remains on track to reach its goal of $100 million. The outlook whereby following the transaction, the outstanding debt with CEEFC is expected to decrease from $773.4 million to $333.7 million. In making these statements, the Corporation assumes, among other things, that the standards and measures for the health and safety of personnel and travellers imposed by government and airport authorities will be consistent with those currently in effect, that workers will continue to be available to the Corporation, its suppliers and the companies providing passenger services at the airports, that credit facilities and other terms of credit extended by its business partners will continue to be made available as in the past, that management will continue to manage changes in cash flows to fund working capital requirements for the full fiscal year and that fuel prices, exchange rates, selling prices and hotel and other costs remain stable, the Corporation will be able to adequately mitigate the Pratt & Whitney GTF engine issues and that the initiatives identified to improve adjusted operating income (adjusted EBITDA) can be implemented as planned, and will result in cost reductions and revenue increases of the order anticipated by mid-2026. If these assumptions prove incorrect, actual results and developments may differ materially from those contemplated by the forward-looking statements contained in this press release. The Corporation considers that the assumptions on which these forward-looking statements are based are reasonable. These statements reflect current expectations regarding future events and operating performance, speak only as of the date this news release is issued, and represent the Corporation's expectations as of that date. For additional information with respect to these and other factors, see the MD&A for the quarter ended April 30, 2025 filed with the Canadian securities commissions and available on SEDAR at
Yahoo
12-06-2025
- Business
- Yahoo
Transat A.T. Inc. Reports Results for the Second Quarter of Fiscal 2025
Revenue Growth and Improved ProductivityBalance Sheet Strengthened through Debt Restructuring Agreement Second-quarter highlights: Revenues of $1,031.1 million, up 5.9% from $973.2 million last year Adjusted EBITDA1 of $98.4 million, compared to $30.2 million last year Net loss of $22.9 million ($0.58 per share), compared to a net loss of $54.4 million ($1.40 per share) last year Free cash flow1 of $142.3 million, compared to $109.8 million last year Cash and cash equivalents of $532.6 million as at April 30, 2025 Elevation optimization Program initiatives implemented to date are expected to deliver an annualized adjusted EBITDA1 run-rate of $67.0 million Reached an agreement in principle for the restructuring of the LEEFF debt incurred in connection with the COVID-19 pandemic MONTRÉAL, June 12, 2025 /CNW/ - Transat A.T. Inc. today reported its second quarter 2025 financial results. "Transat delivered improved operating and financial performances in the second quarter of fiscal 2025, building on the positive momentum that began in the fourth quarter of 2024. During the second quarter, revenue grew 5.9%, driven by a 2.0% year-over-year yield improvement and a 1.6% passenger traffic increase. Tight control of operating expenses led to productivity gains, while lower fuel costs further supported performance, resulting in adjusted EBITDA of $98.4 million. Despite persistent economic uncertainty, Transat is methodically executing its business strategy through disciplined fleet optimization and network expansion. Recent additions of new routes and changes to our program have further strengthened our leadership in providing leisure travel services to Canadian consumers," said Annick Guérard, President and Chief Executive Officer of Transat. "We are making significant progress through our Elevation Program, a comprehensive optimization plan aimed at maximizing long-term profitable growth. The initiatives implemented to date are expected to generate an annualized adjusted EBITDA run rate of $67 million and we remain on track to reach our goal of $100 million. Our teams are fully committed to successfully executing the plan and we expect to benefit directly from cost-saving and revenue-generating initiatives beginning in the second half of the current year," added Ms. Guérard. "We are pleased to have reached a refinancing agreement with our main lender. This represents a major milestone, as it significantly reduces our debt, strengthens our balance sheet, and positions Transat to further implement its long-term strategic plan. In addition, we have reached a new compensation agreement with the manufacturer of the GTF2 engines for the 2025 and 2026 fiscal years, partially recorded during the second quarter as non-cash revenue. We are currently evaluating opportunities to monetize this financial compensation," said Jean-François Pruneau, Chief Financial Officer of Transat. Second-quarter results For the quarter ended April 30, 2025, revenues reached $1,031.1 million, up 5.9% from $973.2 million in the corresponding period last year. The increase was mainly attributable to a 2.0% increase in airline unit revenues (yield) and a 1.6% increase in traffic expressed in revenue-passenger-miles (RPM) compared with 2024. Reflecting disciplined management, the Corporation's capacity was up 2.6% from the corresponding period last year, while capacity for sun routes, the main program during this period, remained stable. In addition, following the agreement entered into with the original equipment manufacturer of the GTF2 engines, a financial compensation of $20.0 million was recorded in revenues. Adjusted EBITDA1 amounted to $98.4 million, compared with $30.2 million in 2024. This increase was mainly attributable to higher revenues, increased productivity, as well as a 18% decrease in fuel prices compared with the corresponding period of 2024. ____________________________ 2 Geared turbofan ("GTF"). Six-month results For the six-month period ended April 30, 2025, revenues reached $1,860.6 million, up 5.8% from $1,758.7 million in the corresponding period a year ago. For the six-month period, network-wide capacity increased by 1.6% compared with 2024, while capacity for sun routes, the main program during this period, increased by 0.5%. Overall, traffic was 1.3% higher than in 2024. The revenue increase also reflects the financial compensation noted above. For the six-month period, adjusted EBITDA1 totaled $118.4 million, compared with $26.8 million for fiscal 2024. The increase was mainly attributable to revenue growth, productivity gains and lower fuel prices. Cash flow and financial position Cash flow related to operating activities amounted to $207.8 million during the second quarter of 2025, compared with $183.2 million for the same period last year, mainly due to higher net income before non-cash operating items this year versus last. After accounting for investing activities and repayment of lease liabilities, free cash flow1 reached $142.3 million during the quarter, compared with $109.8 million for the corresponding period last year. As at April 30, 2025, cash and cash equivalents stood at $532.6 million, compared to $260.3 million as at October 31, 2024. Cash and cash equivalents in trust or otherwise reserved mainly resulting from travel package bookings totaled $295.6 million as at April 30, 2025, compared with $484.9 million as at October 31, 2024, reflecting the seasonal nature of operations. Customers deposits for future travel totaled $888.7 million as at April 30, 2025, comparable to the amount recorded a year earlier. During the six-month period ended April 30, 2025 the Corporation received net proceeds of $30.6 million from the final of the four previously announced spare engine sale-leaseback transactions, completed in early November. Long-term debt and deferred government grant totaled $812.2 million as at April 30, 2025, compared to $803.1 million as at October 31, 2024. Reflecting the proceeds mentioned above and the change in cash, the amount net of cash stood at $279.6 million, down from $542.7 million as at October 31, 2024. Event after the reporting period On June 5, 2025, the Corporation announced that it had reached an agreement in principle with the Canada Enterprise Emergency Funding Corporation (CEEFC) for the restructuring of all its debt contracted under the Large Employer Emergency Financing Facility (LEEFF), managed by the CEEFC. As of April 30, 2025, this debt had a principal amount of $773.4 million and a carrying value of $762.2 million, including the deferred government grant amount. Following the transaction, outstanding debt with CEEFC is expected to decrease from $773.4 million to $333.7 million. Key indicators To date, load factors for the summer period, which consists of the third and fourth quarters, are 1.2 percentage points lower compared to the same date in fiscal 2024, while airline unit revenues, expressed as yield, are 1.7% higher than they were at this time last year. For fiscal year 2025, the Corporation expects an available capacity increase of 1.0%, measured in available seat-miles, compared to 2024. Conference call The second quarter 2025 conference call will take place on Thursday, June 12, 2025, 10:00 a.m. To join the conference call without operator assistance, you may register by entering your phone number here to receive an instant automated call back. You can also dial direct to be entered into the call by an operator:Montreal: 514 400-3794North America (toll-free): 1 800 990-4777Name of conference: Transat The conference will also be accessible live via webcast: click here to register. An audio replay will be available until June 19, 2025, by dialing 1 888 660-6345 (toll-free in North America), access code 91901 followed by the pound key (#). The webcast will remain available for 90 days following the call. Third-quarter 2025 results will be announced on September 11, 2025. (1) Non-IFRS financial measures Transat prepares its financial statements in accordance with International Financial Reporting Standards ["IFRS"]. We will occasionally refer to non-IFRS financial measures in the news release. These non-IFRS financial measures do not have any meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. They are intended to provide additional information and should not be considered as a substitute for measures of performance prepared in accordance with IFRS. All dollar figures are in Canadian dollars unless otherwise indicated. The following are non-IFRS financial measures used by management as indicators to evaluate ongoing and recurring operational performance. Adjusted operating income (loss) or adjusted EBITDA: Operating income (loss) before depreciation, amortization and asset impairment expense, reversal of impairment of the investment in a joint venture, the effect of changes in discount rates used for accretion of the provision for return conditions, restructuring and transaction costs and other significant unusual items, and including premiums related to derivatives that matured during the period. The Corporation uses this measure to assess the operational performance of its activities before the aforementioned items to ensure better comparability of financial results. Adjusted operating income is also used to calculate variable compensation for employees and senior executives. Adjusted pre-tax income (loss) or adjusted EBT: Income (loss) before income tax expense before change in fair value of derivatives, revaluation of liability related to warrants, gain (loss) on long-term debt modification, gain (loss) on business disposals, gain on disposal of investment, gain (loss) on asset disposals, gain on sale and leaseback of assets, the effect of changes in discount rates used for accretion of the provision for return conditions, restructuring and transaction costs, write-off of assets, reversal of impairment of the investment in a joint venture, foreign exchange gain (loss) and other significant unusual items, and including premiums related to derivatives that matured during the period. The Corporation uses this measure to assess the financial performance of its activities before the aforementioned items to ensure better comparability of financial results. Adjusted net income (loss): Net income (loss) before change in fair value of derivatives, revaluation of liability related to warrants, gain (loss) on long-term debt modification, gain (loss) on business disposals, gain on disposal of investment, gain (loss) on asset disposals, gain on sale and leaseback of assets, the effect of changes in discount rates used for accretion of the provision for return conditions, restructuring and transaction costs, write-off of assets, reversal of impairment of the investment in a joint venture, foreign exchange gain (loss), reduction in the carrying amount of deferred tax assets and other significant unusual items, and including premiums related to derivatives that matured during the period, net of related taxes. The Corporation uses this measure to assess the financial performance of its activities before the aforementioned items to ensure better comparability of financial results. Adjusted net income (loss) is also used in calculating the variable compensation of employees and senior executives. Adjusted net earnings (loss) per share: Adjusted net income (loss) divided by the adjusted weighted average number of outstanding shares used in computing diluted earnings (loss) per share. Free cash flow: Cash flows related to operating activities less cash flows related to investing activities and repayment of lease liabilities. The Corporation uses this measure to assess the cash that's available to be distributed in a discretionary way such as repayment of long-term debt or deferred government grant or distribution of dividend to shareholders. Total debt: Long-term debt plus lease liabilities, deferred government grant and liability related to warrants, net of deferred financing costs related to the subordinated debt - LEEFF. Management uses total debt to assess the Corporation's debt level, future cash needs and financial leverage ratio. Management believes this measure is useful in assessing the Corporation's capacity to meet its current and future financial obligations. Total net debt: Total debt (described above) less cash and cash equivalents. Total net debt is used to assess the cash position relative to the Corporation's debt level. Management believes this measure is useful in assessing the Corporation's capacity to meet its current and future financial obligations. Additional Information The results were affected by non-operating items, as summarized in the following table: Highlights and non-IFRS financial measuresSecond quarter First six-month period 2025 2024 2025 2024 (in thousands of Canadian dollars, except per share amounts) $ $ $ $Operating income (loss) 37,270 (15,161) (14,686) (67,590) Depreciation and amortization 62,680 54,748 125,645 104,912 Reversal of impairment of the investment in a joint venture — — — (3,112) Effect of discount rate changes (887) (7,485) 6,262 (2,210) Restructuring costs 979 1,911 4,057 1,977 Premiums related to derivatives that matured during the period (1,596) (3,863) (2,863) (7,177) Adjusted operating income¹ or adjusted EBITDA¹ 98,446 30,150 118,415 26,800Net loss (22,884) (54,387) (145,416) (115,364) Reversal of impairment of the investment in a joint venture — — — (3,112) Effect of discount rate changes (887) (7,485) 6,262 (2,210) Restructuring costs 979 1,911 4,057 1,977 Gain on asset disposals — — (5,183) (5,784) Change in fair value of derivatives 92,241 (4,978) 88,779 17,181 Revaluation of liability related to warrants (2,119) (6,236) (2,126) 5,511 Foreign exchange (gain) loss (60,999) 28,170 (13,527) (13,957) Gain on long-term debt modification — — (216) — Premiums related to derivatives that matured during the period (1,596) (3,863) (2,863) (7,177) Adjusted net income (loss)¹ 4,735 (46,868) (70,233) (122,935)Adjusted net income (loss)¹ 4,735 (46,868) (70,233) (122,935) Adjusted weighted average number of outstanding shares used in computing diluted earnings per share 39,752 38,713 39,607 38,645 Adjusted net earnings (loss) per share¹ 0.12 (1.21) (1.77) (3.18) Cash flows related to operating activities 207,842 183,216 376,420 293,918 Cash flows related to investing activities (19,312) (31,247) (11,578) (59,992) Repayment of lease liabilities (46,251) (42,184) (93,434) (85,048) Free cash flow1 142,279 109,785 271,408 148,878 As at April 30, 2025 As at October 31, 2024 (in thousands of dollars) $ $ Long-term debt 705,562 682,295 Deferred government grant 106,626 120,784 Liability related to warrants 6,393 8,519 Lease liabilities 1,369,221 1,465,722 Total debt1 2,187,802 2,277,320Total debt 2,187,802 2,277,320 Cash and cash equivalents (532,611) (260,336) Total net debt1 1,655,191 2,016,984 About Transat Founded in Montreal 37 years ago, Transat has achieved worldwide recognition as a provider of leisure travel particularly as an airline under the Air Transat brand. Voted World's Best Leisure Airline by passengers at the 2024 Skytrax World Airline Awards, it flies to international destinations. By renewing its fleet with the most energy-efficient aircraft in their category, it is committed to a healthier environment, knowing that this is essential to its operations and the destinations it serves. Based in Montreal, Transat has 5,000 employees with a common purpose to bring people closer together. (TSX: TRZ) Caution regarding forward-looking statements This news release contains certain forward-looking statements with respect to the Corporation, including those regarding its results, its financial position and its outlook for the future. These forward-looking statements are identified by the use of terms and phrases such as "anticipate" "believe" "could" "estimate" "expect" "intend" "may" "plan" "potential" "predict" "project" "will" "would", the negative of these terms and similar terminology, including references to assumptions. All such statements are made pursuant to applicable Canadian securities legislation. Such statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. The forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, economic conditions, changes in demand due to the seasonal nature of the business, extreme weather conditions, climatic or geological disasters, war, political instability, measures taken, planned or contemplated by governments regarding the imposition of tariffs on exports and imports, real or perceived terrorism, outbreaks of epidemics or disease, consumer preferences and consumer habits, consumers' perceptions of the safety of destination services and aviation safety, demographic trends, disruptions to the air traffic control system, the cost of protective, safety and environmental measures, competition, maintain and grow its reputation and brand, the availability of funding in the future, the Corporation's ability to repay its debt from internally generated funds or otherwise, the Corporation's ability to adequately mitigate the Pratt & Whitney GTF engine issues, fluctuations in fuel prices and exchange rates and interest rates, the Corporation's dependence on key suppliers, the availability and fluctuation of costs related to our aircraft, information technology and telecommunications, cybersecurity risks, changes in legislation, regulatory developments or procedures, pending litigation and third-party lawsuits, the ability to reduce operating costs through the Elevation program initiatives, among other things, the Corporation's ability to attract and retain skilled resources, labour relations, collective bargaining and labour disputes, pension issues, maintaining insurance coverage at favourable levels and conditions and at an acceptable cost, and other risks detailed in the Risks and Uncertainties section of the MD&A included in our 2024 Annual Report. The reader is cautioned that the foregoing list of factors is not exhaustive of the factors that may affect any of the Corporation's forward-looking statements. The reader is also cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements. The forward-looking statements in this news release are based on a number of assumptions relating to economic and market conditions as well as the Corporation's operations, financial position and transactions. Examples of such forward-looking statements include, but are not limited to, statements concerning: The outlook whereby the Corporation will be able to meet its obligations with cash on hand, cash flows from operations, drawdowns under existing or other credit facilities. The outlook whereby, for fiscal year 2025, the Corporation expects an available capacity increase of 1.0%, measured in available seat-miles, compared to 2024. The outlook whereby the initiatives implemented to date are expected to generate an annualized adjusted EBITDA run rate of $67 million and the Corporation remains on track to reach its goal of $100 million. The outlook whereby following the transaction, the outstanding debt with CEEFC is expected to decrease from $773.4 million to $333.7 million. In making these statements, the Corporation assumes, among other things, that the standards and measures for the health and safety of personnel and travellers imposed by government and airport authorities will be consistent with those currently in effect, that workers will continue to be available to the Corporation, its suppliers and the companies providing passenger services at the airports, that credit facilities and other terms of credit extended by its business partners will continue to be made available as in the past, that management will continue to manage changes in cash flows to fund working capital requirements for the full fiscal year and that fuel prices, exchange rates, selling prices and hotel and other costs remain stable, the Corporation will be able to adequately mitigate the Pratt & Whitney GTF engine issues and that the initiatives identified to improve adjusted operating income (adjusted EBITDA) can be implemented as planned, and will result in cost reductions and revenue increases of the order anticipated by mid-2026. If these assumptions prove incorrect, actual results and developments may differ materially from those contemplated by the forward-looking statements contained in this press release. The Corporation considers that the assumptions on which these forward-looking statements are based are reasonable. These statements reflect current expectations regarding future events and operating performance, speak only as of the date this news release is issued, and represent the Corporation's expectations as of that date. For additional information with respect to these and other factors, see the MD&A for the quarter ended April 30, 2025 filed with the Canadian securities commissions and available on SEDAR at The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable securities legislation. ( Media: Andréan GagnéSenior Director, Public Affairs and 514-987-1616, ext. 104071 Financial analysts: Jean-François PruneauChief Financial 987-1616 ext. 4567 Media site and image bank: SOURCE Transat A.T. Inc. View original content: Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Cision Canada
05-06-2025
- Business
- Cision Canada
Transat A.T. Inc. and CEEFC Announce Agreement in Principle for the Restructuring of the LEEFF Debt Français
Transat and CEEFC reach agreement in principle for the restructuring of the LEEFF debt incurred in connection with the COVID-19 pandemic Outstanding debt with CEEFC reduced to $334M from $772M as at March 31, 2025 Transaction will substantially deleverage the balance sheet and provide flexibility to further implement long term sustainable strategic plan Repayment to CEEFC of $41.4M in cash and issuance of $16.3M of preferred shares, convertible into Class B Voting Shares representing 19.9 % of the issued and outstanding voting shares MONTREAL, June 5, 2025 /CNW/ - Transat A.T. Inc. ("Transat" or the "Corporation") announced today that it has reached an agreement in principle with Canada Enterprise Emergency Funding Corporation ("CEEFC") for the restructuring of the indebtedness incurred by Transat under the Large Enterprise Emergency Funding Facility (LEEFF) program managed by CEEFC in the context of the COVID-19 pandemic (the "Transaction"). The Transaction remains subject to the execution of definitive agreements and documentation giving effect to the Transaction. "We are pleased to have been able to reach this agreement, which will substantially deleverage our balance sheet and pave the way for Transat to further implement its long term sustainable strategic plan and complete the implementation of its Elevation program" said Mrs. Annick Guérard, Transat's President and Chief Executive Officer. "CEEFC has worked closely with Transat to ensure it meets its obligations under the LEEFF program while supporting the company's continued commercial viability in a competitive market," says Elizabeth Wademan, President and CEO of Canada Development Investment Corporation (CDEV), the parent company of CEEFC. "LEEFF has been a successful program by making emergency loans available to Canada's large employers to enable them to stay solvent and save jobs both during the pandemic and beyond." Key Transaction Terms The agreement deals with the entire indebtedness of the Corporation with CEEFC, and results in such indebtedness, currently in a principal amount of approximately $772M in the aggregate as at March 31, 2025, being restructured as follows: Repayment of $41.4M in cash to CEEFC Credit facilities reduced to a single credit facility of $175M Issuance to CEEFC of a $158,735,045 debenture maturing in 10 years Issuance to CEEFC of $16,264,955 of preferred shares convertible into Class B Voting Shares representing 19.9% of the issued and outstanding voting shares based on the 5-day VWAP on the date hereof Credit Facility The $175M credit facility will have a 10-year term with interest accruing at a rate of 1.22% per annum for the first three years, and 3% per annum thereafter. The facility will be secured by a second lien on all the assets of Transat and its subsidiaries which are borrowers under the facility, including Air Transat Inc. Debenture As part of the restructuring transaction, an amount of $158,735,045 of CEEFC indebtedness will be converted into a new debenture maturing in 10 years (the "Debenture"). The Debenture shall not have any interest accruing in the first five years. Following the fifth anniversary date of its issuance, interest will accrue at a rate of 7% per annum (the "Interest Rate"), increasing by 1.0% per annum thereafter up to a maximum of 12% per annum. Upon the occurrence of a Mandatory Prepayment Event (defined below), Transat shall, at the option of CEEFC, make a repayment of the principal amount of the Debenture, plus accrued and unpaid interest thereon. Following the five-year anniversary of the Transaction closing date, Transat will repay at least 10% of the principal amount of the Debenture annually, plus accrued and unpaid interest thereon. Any outstanding principal amount, plus all accrued and unpaid interest thereon, may be repaid at any time. Preferred Shares As part of the restructuring transaction, an amount of $16,264,955 of CEEFC indebtedness will be converted into preferred shares of Transat at a price of $1.6372 per share (the "Initial Redemption Price"), corresponding to the 5-day volume weighted average trading price for the shares of Transat on the Toronto Stock Exchange on the date prior to the announcement of the agreement in principle with CEEFC for the Transaction, for a total of 9,934,617 preferred shares (the "Preferred Shares"). The Preferred Shares shall be non-voting and will have preference over Class A Variable Voting Shares and Class B Voting Shares (collectively, the "Common Shares") in the event of liquidation, dissolution or winding-up. The Preferred Shares will also have the following key terms: Dividends: No fixed dividend. Entitled to the same dividend per share as any dividend declared on the Common Shares. Conversion: The Preferred Shares will be convertible into Transat Class B shares at any time after the second anniversary date of the Transaction closing date on a one-for-one basis (with such Class B shares to be subject to CEEFC's registration rights under an amended and restated investor rights agreement). Redemption: Redeemable upon the occurrence of a Mandatory Prepayment Event (as defined below), in whole or in part, at the option of CEEFC, at a price per share equal to the greater of (i) the Initial Redemption Price and (ii) the 5-day VWAP of the Common Shares on the day prior to notice of redemption, in each case plus all declared and unpaid dividends. Change of Control: Upon a change of control, (A) all outstanding Preferred Shares shall be redeemed at a price per share equal to the greater of (i) the Initial Redemption Price, and (ii) the value of the consideration paid per Common Share pursuant to the transaction giving rise to the change of control, in each case plus all declared and unpaid dividends. Existing Warrants All 13,000,000 outstanding share purchase warrants (the "Warrants") held by CEEFC and issued in connection with the LEEFF facilities in April 2021 will be maintained, and their expiry extended from April 29, 2031 to 2035, and more specifically the date falling on the tenth anniversary of the Transaction closing date. These Warrants entitle CEEFC to purchase an equivalent number of Class B voting shares of Transat at a price of $4.50 per share, subject to a maximum number of shares not exceeding the lesser of (i) 9,436,772 Class B voting shares and (ii) that number of Class B voting shares which, when aggregated with the number of shares owned or controlled by CEEFC at the time of exercise, equals 19.9% of the issued and outstanding Common Shares after giving effect to the exercise. The terms of the Warrants contemplate that any portion exercised in excess of such threshold is payable in cash on the basis of the difference between the market price of Transat's shares on the Toronto Stock Exchange and the exercise price (the "Deemed Cash Settlement Option"). As part of the Transaction, the parties agree that the Deemed Cash Settlement Option under the Warrants shall be limited to a maximum of 3,563,228 Warrants and subject to the prior exercise of 9,436,772 Warrants for an equivalent number of Class B voting shares. The other terms of the Warrants remain unchanged. Between the Warrants and Preferred Shares, CEEFC will hold securities exercisable or convertible for an aggregate of 19,371,389 Class B voting shares, representing approximately 32.6% of the outstanding Common Shares after giving effect to such exercise or conversion, provided that at no time will the exercise of warrants or conversion of Preferred Shares result in CEEFC beneficially owning or controlling in excess of 19.9% of the Common Shares. CEEFC intends to hold the Preferred Shares for investment purposes. Depending on market conditions and other factors, including Transat's business and financial condition, CEEFC may dispose of some or all of the securities of Transat that it owns. CEEFC and its affiliates do not intend to acquire additional equity securities of Transat except through the possible exercise of the warrants and conversion of the Preferred Shares. Existing Revolving Credit Facilities Transat's existing $50M senior revolving credit facility and $74M revolving credit facility for letters of credit are not part of the restructuring and will remain in place and available to Transat. As part of the restructuring, Transat has agreed with CEEFC to repay 50% of the senior revolving credit facility by no later than November 1, 2026. Transat also agreed that a portion of the cash generated from certain occurrences, including the monetization and sale of certain assets in excess of certain thresholds and cash flow exceeding certain thresholds ("Mandatory Prepayment Events"), will be repaid to CEEFC and will be made available to Transat in the form of working capital advances, in an amount of up to $50M until the senior revolving credit facility is reduced and $75M thereafter, with interest accruing at a rate of 7% per annum for the first year (being the equivalent of 3-month Term CORRA plus 4.50%), resetting each year thereafter at a rate per annum equal to the 3-month Term CORRA plus 4.50%. Pro Forma Consolidated Capitalization The table below serves to illustrate the impact of the restructuring under the Transaction, presenting on an actual and pro forma basis as at January 31, 2025 the consolidated capitalization of the Corporation. This table should be read in conjunction with the interim financial statements and related management's discussion and analysis for the quarter ended on January 31, 2025. (1) Long-term debt, deferred government grant and lease liabilities Additional Details about the Transaction The Transaction is subject to the finalization of definitive agreements. The Transaction is also subject to the approval of the Toronto Stock Exchange with respect to the issuance of the Preferred Shares. Assuming that the parties are able to finalize definitive agreements and secure the necessary approvals within the contemplated timeline, closing of the Transaction is expected to take place in the third quarter of calendar year 2025. Given that CEEFC holds warrants entitling it to acquire up to 19.9% of the Company's Common Shares, it may constitute a related party for the purposes of Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions ("Regulation 61-101"). The Corporation relied on the formal valuation and minority approval exemptions contained in sections 5.5(g) and 5.7(1)(e) of Regulation 61-101 given that the transaction improves the financial position of the Corporation, which was becoming extremely precarious due to the size of its debt. The announced Transaction is the result of discussions initiated by the Corporation over 18 months ago with CEEFC and the review of a range of alternatives with the assistance of a special advisory committee of the Board of Directors made up entirely of independent directors with a view to establishing an optimal capital structure over the long term. The transaction received the unanimous approval of the Board of Directors on the unanimous recommendation of the Special Committee which completed its work with the assistance of external financial and legal advisors. Caution Regarding Forward-Looking Information This news release contains certain forward-looking statements with respect to the Corporation, including those regarding its results, its financial position and its outlook for the future. These forward-looking statements are identified by the use of terms and phrases such as "anticipate" "believe" "could" "estimate" "expect" "intend" "may" "plan" "potential" "predict" "project" "will" "would", the negative of these terms and similar terminology, including references to assumptions. All such statements are made pursuant to applicable Canadian securities legislation. Such statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. The forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, economic conditions, changes in demand due to the seasonal nature of the business, extreme weather conditions, climatic or geological disasters, war, political instability, measures taken, planned or contemplated by governments regarding the imposition of tariffs on exports and imports, real or perceived terrorism, outbreaks of epidemics or disease, consumer preferences and consumer habits, consumers' perceptions of the safety of destination services and aviation safety, demographic trends, disruptions to the air traffic control system, the cost of protective, safety and environmental measures, competition, maintain and grow its reputation and brand, the availability of funding in the future, the Corporation's ability to repay its debt from internally generated funds or otherwise, the Corporation's ability to adequately mitigate the Pratt & Whitney GTF engine issues, fluctuations in fuel prices and exchange rates and interest rates, the Corporation's dependence on key suppliers, the availability and fluctuation of costs related to our aircraft, information technology and telecommunications, cybersecurity risks, changes in legislation, regulatory developments or procedures, pending litigation and third-party lawsuits, the ability to reduce operating costs through the Elevation program initiatives, among other things, the Corporation's ability to attract and retain skilled resources, labour relations, collective bargaining and labour disputes, pension issues, maintaining insurance coverage at favourable levels and conditions and at an acceptable cost, and other risks detailed in the Risks and Uncertainties section of the MD&A included in our 2024 Annual Report. The reader is cautioned that the foregoing list of factors is not exhaustive of the factors that may affect any of the Corporation's forward-looking statements. The reader is also cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements. The forward-looking statements in this news release are based on a number of assumptions relating to economic and market conditions as well as the Corporation's operations, financial position and transactions. Examples of such forward-looking statements include, but are not limited to, statements concerning: The outlook whereby the Corporation will be able to meet its obligations with cash on hand, cash flows from operations drawdowns under existing credit facilities or otherwise. The outlook whereby for fiscal year 2025, the Corporation expects to increase available capacity by 2%, measured in available seat-miles, compared to 2024, with potential adjustments depending on the evolving situation with Pratt & Whitney GTF2 engine issues. The outlook whereby the initiatives implemented to date are expected to generate an annualized adjusted EBITDA run-rate of $37 million. The program remains on track to reach $100 million by mid-2026. In making these statements, the Corporation assumes, among other things, that the standards and measures for the health and safety of personnel and travellers imposed by government and airport authorities will be consistent with those currently in effect, that workers will continue to be available to the Corporation, its suppliers and the companies providing passenger services at the airports, that credit facilities and other terms of credit extended by its business partners will continue to be made available as in the past, that management will continue to manage changes in cash flows to fund working capital requirements for the full fiscal year and that fuel prices, exchange rates, selling prices and hotel and other costs remain stable, the Corporation will be able to adequately mitigate the Pratt & Whitney GTF engine issues and that the initiatives identified to improve adjusted operating income (adjusted EBITDA) can be implemented as planned, and will result in cost reductions and revenue increases of the order anticipated by mid-2026. If these assumptions prove incorrect, actual results and developments may differ materially from those contemplated by the forward-looking statements contained in this press release. The Corporation considers that the assumptions on which these forward-looking statements are based are reasonable. These statements reflect current expectations regarding future events and operating performance, speak only as of the date this news release is issued, and represent the Corporation's expectations as of that date. For additional information with respect to these and other factors, see the MD&A for the quarter ended January 31, 2025 filed with the Canadian securities commissions and available on SEDAR at The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable securities legislation. About Transat AT Inc. Founded in Montreal 37 years ago, Transat has achieved worldwide recognition as a provider of leisure travel particularly as an airline under the Air Transat brand. Voted World's Best Leisure Airline by passengers at the 2024 Skytrax World Airline Awards, it flies to international destinations. It renews its fleet with the most energy-efficient aircraft in its category, which is essential to ensure the energy efficiency of its operations. Based in Montreal, Transat has 5,000 employees with a common purpose to bring people closer together. (TSX: TRZ) About CEEFC CEEFC is a federal Crown corporation, incorporated in May 2020 under the Canada Business Corporations Act and is wholly owned subsidiary of Canada Development Investment Corporation. CEEFC currently manages the Large Employer Emergency Financing Facility (LEEFF) program and the Large Enterprise Tariff Loan (LETL) facility. An early warning report will be filed by CEEFC in accordance with applicable securities laws and will be available on SEDAR+ at or may be obtained directly from CEEFC upon request from Mr. Bruno Lemay at 416-966-0185. Media: Andréan Gagné Senior Director, Communications, Public Affairs and Corporate Responsibility [email protected] 514 987-1616, ext. 104071 Financial analysts: Juliette Gauthier Senior Director, Investor Relations and Corporate Finance [email protected] 514 987-1616, ext. 104019 SOURCE Transat A.T. Inc.
