RE:RE:RE:RE:Us and large sharholdersCIBC report issued today...the final header:
"What would TRZ’s unaffected share price be if it were not for the deal? TRZ’s F2019 EBITDA (adjusting for IFRS 16) is ~$180MM. If we take into consideration some of its initiatives and expectations pre-crisis, we could expect EBITDA of ~$230MM by F2021E. Using a 3x multiple and TRZ’s current debt of $690MM and applying a normalized cash level of ~$400MM implies ~$10/share. With airline equities down ~60%-65% this would suggest an unaffected price of ~$4/share for TRZ."
In 2001 Air Canada was arm twisted into saving a broken Canaddian Airlines. Due to conditions in that agreement Air Canada had to restructure in 2009. That was a truly "Made in Canada solution".
In 2019 we are facing the same situation with AC and Air Transat. Air Canada was flourishing before and should survive Covid 19. Transat could run its course on its own and should be restructuring in a year or 5 due to Covid 19. That is how it should happen. But now here is the made in Canada solution. Have the strong airline that would survive on it s own, buy the bankrupt airliine with so many union, government and pension conditions on the deal that it will hobble the strong air line from coming strongly out of the Covid 19 pandemic.
Especially as pointed out in this analysis, the buy out price on the material adverse change clause will be reduced to only 20 million dollars if it cannot pass EU regulatory hurdles.
For "Us" sharholders this just makes sense.