https://aviationstrategy.aero/newsletter/Nov-2004/4/Air-Canada:fundamentally-reinvented
Second, Air Canada raised C$1.1bn in new equity capital in the restructuring.
Of that, C$850m came from a rights offering earlier this year, under which creditors swapped debt for equity (receiving about 10 cents of equity for every dollar of claims).
Subsequently, in the summer, New York private- equity firm Cerberus Capital Management agreed to purchase C$250m of convertible preferred shares in the new entity.
The result is a shareholder base dominated by former debt holders.
Cerberus has a 9.16% stake. Original shareholders hold less than 0.01% (they received one new share for 11,894 old shares in the rights offering). Because there are relatively few retail or institutional investors, trading is expected to be fairly limited. Non–Canadian holding is expected to remain small — up to 25% would be permitted.
Under the new corporate structure, ACE Aviation Holdings (ACE) is the parent company for Air Canada and other business segments.
In addition to Aeroplan (FFP), Jazz (regional division), Destina.ca (travel web site) and Touram (vacations), which were already separate legal entities, the restructuring established three new legal entities under the ACE umbrella: Air Canada Technical Services (ACTS), Air Canada Cargo and Air Canada Groundhandling. The board of ACE is led by Robert Milton as chairman and Michael Green of Cerberus as lead director.
Overall, the restructuring reduced Air Canada’s net debt and capitalised leases from C$12bn to C$5bn. The airline also exited bankruptcy with a relatively healthy cash position of C$1.9bn.