Chorus Aviation Inc. announces partial redemption of convertible debentures due December 31, 2014

Published on : Wednesday, January 8, 2014

Chorus-AviationChorus Aviation Inc. today announced that is has exercised its right to partially redeem its 9.50% Convertible Unsecured Subordinated Debentures (‘Debentures’) maturing on December 31, 2014, in accordance with the terms of the trust indenture governing the Debentures (‘Trust Indenture’). On February 10, 2014 (the ‘Redemption Date’), Chorus will redeem C$60.0 million of C$80.21 million aggregate principal amount of Debentures currently outstanding, representing approximately 75.0% of the current outstanding balance of Debentures. The Debentures will be redeemed on a pro rata basis. On redemption, Chorus will pay to the holders of the redeemed Debentures the outstanding principal amount of the Debentures to be redeemed (the ‘Redemption Price’), together with all accrued and unpaid interest thereon up to but excluding the Redemption Date, for a total of C$1,010.671238 per C$1,000.00 principal amount of Debentures. The Debentures that are redeemed will cease to bear interest from and after the Redemption Date.

Chorus intends to use surplus cash to pay the Redemption Price, together with all accrued and unpaid interest thereon as described above. Following the redemption, C$20.21 million of Debentures will be outstanding.

Pursuant to the terms of the Trust Indenture, holders of the Debentures that are to be redeemed have the right until the last business day prior to the Redemption Date to convert their Debentures into Class A Variable Voting Shares (‘Class A Shares’) or Class B Voting Shares (‘Class B Shares’) of Chorus, as applicable, in accordance with the Trust Indenture and the provisions attaching to the Class A Shares and the Class B Shares , at a conversion price of C$5.25 per Share, being a rate of 190.4762 Shares per C$1,000.00 principal amount of Debentures.

“In addition to our recently announced dividend increase, using a portion of our year-end surplus cash to early retire $60.0 million of this 9.5% maturing debt is another step in our strategy to begin investing in long-term value propositions that will be accretive to our shareholders,” stated Joseph Randell, President and Chief Executive Officer, Chorus. “The balance outstanding on these debentures is planned to be redeemed with future cash flow from operations either before or at their December 31, 2014 maturity date.”

Source:- Chorus Aviation


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