Canadian carriers strive to increase foreign voting shares
WestJet, Air Canada (ADH2) is seeking shareholder approval to increase the limits on foreign ownership and control of their voting shares. If airlines manage to get their respective shareholders’ approvals, they will then have to seek an approval by court. Similarly, Transat AT is also seeking the increase of its foreign ownership.
All the announcements were made on February 15, 2019, in relation to amendments made to the Canada Transportation Act (CTA) in 2018.
Since January 30, 2019, CTA defines a Canadian company as corporation or entity which is owned by Canadians by at least 51%. Thus, the remaining 49% of voting interest can be owned and controlled by foreigners. However, restrictions apply. In particular, voting rights are capped at 25% for one single non-Canadian or the aggregate of non-Canadian air carriers.
Previously, at least 75% of the voting interests of licensed Canadian air carriers had to be owned and controlled by Canadians.
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