Air Canada (ADH2) raised an additional $909 million (CAD1.23 billion) of capital in order to bolster its financial positions going forward. The company’s total raised capital since the start of the pandemic now equals $4 billion (CAD5.5 billion).
The Montreal-based airline completed two financial transactions in June 2020. One, equaling $621 million (CAD840 million), was completed in the form of secured notes that are due by 2024. Air Canada (ADH2) guaranteed the loan via its own assets, including airport slots, gate leaseholds and routes, in addition to the Canadian airline’s real estate and ground service equipment.
The other transaction, worth approximately $315 million, was a Class C Enhanced Equipment Trust Certificate (EETC), which was secured by the airline‘s 27 aircraft. The newly-secured debt on the $315 million tranche is set to mature in July 2026.
“The fact Air Canada (ADH2) was able to add $1.23 billion to its liquidity with these last two transactions without utilizing any of its previously disclosed unencumbered assets leaves the airline in an excellent position to access additional funds should the need arise,” stated the managing director and treasurer of Air Canada, (ADH2) Pierre Houle. The airline plans to end Q2 2020 with at least $6.6 billion (CAD9 billion) of liquidity.
While Air Canada (ADH2) had a strong relative position, according to Houle, the airline was still bleeding cash. Calin Rovinescu, the chief executive of the Canadian carrier, pleaded the government to lighten travel restrictions in June 2020, so that the company could “do some reasonable amount of business.”