Chorus Aviation Inc T.CHR

Falko is about to be sold

[SleepingGiant64]

https://www.linkedin.com/posts/airfinance-global_exclusive-falko-regional-aircraft-is-activity-7216909620005474304-9sz_/

Chorus got cooked on the initial deal for Falko and those $375m in prefs yielding 9% sure eat up a lot of cash (and they have to pay 1.4x to buy them back). I'd imagine they need to unload it for at least $1.4b (incl debt) to come out ahead.

That would leave something like an EV of $1.2b.. At that point, they might as well sell the whole thing to Air Canada.

[SleepingGiant64]

This was a layup. I was worried they would sell it for $1.3b or something but $1.9b is amazing. Finally some shareholder-friendly moves. I'll be shocked if the stock doesn't jump on this.

[equityresearch]

Pretty good sales price. Almost the amount of the enterprise value of the ENTIRE company pre-sale. This will hopefully set them up to reinstate the dividend and/or sell the rest of the company for a premium.

[SleepingGiant64]

I agree that it's a good price. I'm a bit confused here on what's all included though, as it's more than just Falko. But it should make the company much easier to value going forward.

[equityresearch]

Benefits from selling RAL segment: a) sale price represents a significant premium to the implied valuation; b) provides the ability to accelerate return to capital to shareholders; c) results in a simplified Chorus, with substantial liquidity and flexibility for future growth

[luscar99]

This post has been removed in accordance with Community Policy

[flamingogold]

That was another CEO, Joeseph Randall, who made the Falko deal. Time will tell if this new "clean" deal is better or worse but after more than 2 years Mr. Copp saw it best to return to Chorus' roots. FWIW, I have owned BBD for over 7 years and under the guidance of CEO Alain Bellemare, the company flounderd with failed promises. Once Eric Martel took over the turnaournd began