The Canadian Government is eliminating the maximum 15% individual ownership restriction on Air Canada shares, paving the way for a possible take-over. Ottawa hopes the move will inject much-needed equity into the beleaguered carrier.
A shareholder rights plan adopted during Onex's failed 1999 takeover bid for Air Canada requires board approval for anyone acquiring more than 20% of the airline, however.
Air Canada has welcomed the government's move, but would like to see an increase in the foreign ownership limit from 25% to 49%.
Meanwhile, Air Canada's fleet ownership has dropped to 26% compared with 43% prior to its merger with Canadian Airlines following new lease deals. Air Canada will receive C$170 million ($109 million) by leasing back five Airbus A320s it sold to unidentified lessors for C$450 million and will take delivery under lease of a new Boeing 767-300ER. The carrier has also finalised a deal to lease its first three A321s from a syndicate of European banks.
Meanwhile, the government is believed to be considering emergency financing for Canada 3000 because it fears without cash it could be vulnerable to a takeover by Air Canada.
Canada 3000 chairman John Leckey says the airline could run out of cash by Christmas if it does not get loan guarantees from Ottawa.
Source: Flight International
