CHR:CC - Chorus Aviation announces redemption of its 6.00% Senior Debentures and sale of two wholly owned aircraft

Canada NewsWire

HALIFAX, NS , Dec. 14, 2022 /CNW/ - Chorus Aviation Inc. ("Chorus") (TSX: CHR) today announced that it will redeem the remaining $115,000 ,000 principal amount of Chorus' 6.00% Senior Debentures due December 31, 2024 (the "Debentures"), representing all of the Debentures currently outstanding. The redemption is expected to close on or about December 30, 2022 .

The Debentures will be redeemed at par (being $1,000 for each $1,000 principal amount of Debentures), plus accrued and unpaid interest until but excluding the redemption date.  The Debentures are secured by certain Dash 8-100 and Dash 8-300 aircraft and real estate property owned by Chorus' subsidiaries (the "Collateral Security"). The Collateral Security will be released following the redemption of the Debentures.

In connection with the issuance of the Debentures, Chorus issued 24,242,424.242 warrants to affiliates of Fairfax Financial Holdings Limited ("Fairfax") entitling the holder thereof to acquire, on exercise of each warrant and subject to certain adjustments, one Class A Variable Voting Share or Class B Voting Share of Chorus at a price of $8.25 per share (the "Warrants"). The Warrants will automatically expire upon the redemption of the Debentures.

The redemption will be funded using the net proceeds from a recently-completed sale of two wholly-owned aircraft by its subsidiary, Falko Regional Aircraft ("Falko"), as well as Chorus' available cash resources. The sale of the two aircraft, which were previously on lease, generated net proceeds of approximately US $53.5 million. Joe Randell , President and Chief Executive Officer, Chorus stated "The sale of these aircraft demonstrates Falko's ability to generate cash flows from trading while enabling a reduction in Chorus' debt and associated leverage. We will continue to look for opportunistic aircraft sale transactions that advance our transition to an asset-light leasing business and enhance shareholder value."

The redemption of the Debentures and the aircraft sales referenced in this news release are not expected to materially change the financial forecast set out in the Outlook section of Chorus' news release dated November 9, 2022.

This news release contains forward-looking information as defined under applicable Canadian securities laws. Forward-looking information is identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "potential", "project", "will", "would", and similar terms and phrases, including references to assumptions.  Such information may involve but is not limited to comments with respect to strategies, expectations, planned operations or future actions.  Forward-looking information relates to analyses and other information that is based on forecasts of future results, estimates of amounts not yet determinable and other uncertain events.  Forward-looking information, by its nature, is based on assumptions, including those referenced below, and is subject to important risks and uncertainties. Forward-looking information cannot be relied upon due to, among other things, external events, changing market conditions and general uncertainties of the business. Such information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from those indicated in the forward-looking information. Examples of forward-looking information in this news release include the anticipated redemption of the Debentures on or about December 30, 2022 on the terms described herein. Actual results may differ from those indicated in forward-looking information for a number of reasons, including those described in Chorus' public disclosure record available under Chorus' profile on www.sedar.com . Statements containing forward-looking information in this news release are made as of the date of this news release and Chorus does not undertake any obligation to publicly update such statements to reflect new information, subsequent events or otherwise unless required by applicable securities laws.

Chorus' vision is to deliver regional aviation to the world. Headquartered in Halifax, Nova Scotia , Chorus is an integrated provider of regional aviation solutions, including asset management services. Its principal subsidiaries are: Falko Regional Aircraft, the world's largest asset manager and aircraft lessor focused solely on the regional aircraft leasing segment; Jazz Aviation, the sole provider of regional air services under the Air Canada Express brand; and Voyageur Aviation, a provider of specialty air charter, aircraft modification, and parts provisioning services to regional aviation customers around the world. Together, Chorus' subsidiaries provide support services that encompass every stage of a regional aircraft's lifecycle, including: aircraft acquisition and leasing; aircraft refurbishment, engineering, modification, repurposing and transition; contract flying; aircraft and component maintenance, disassembly, and parts provisioning.

Chorus Class A Variable Voting Shares and Class B Voting Shares trade on the Toronto Stock Exchange under the trading symbol 'CHR'. Chorus' 6.00% Senior Debentures due December 31, 2024 , 5.75% Senior Unsecured Debentures due December 31, 2024, 6.00% Convertible Senior Unsecured Debentures due June 30, 2026, and 5.75% Senior Unsecured Debentures due June 30, 2027 trade on the Toronto Stock Exchange under the trading symbols 'CHR.DB', 'CHR.DB.A', 'CHR.DB.B', and 'CHR.DB.C', respectively. www.chorusaviation.com

SOURCE Chorus Aviation Inc.

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