Canada Jetlines plans to raise between $1.2million and $1.5 million from a non-brokered private placement, consisting of units issued at $0.255 each. Each unit will have one variable voting share and a half of one warrant; with each warrant the holder can purchase an additional share for 24 months after closing at a price of $0.40 per warrant share.
Canada Jetlines expects the founding shareholder Global Crossing Airlines Group and the executives as well as the management team to participate in the capital raise.
In order to encourage share ownership by employees, Canada Jetlines will be offering all of its employees the chance to participate with a bonus incentive. Employees that participate in the offering with receive one additional unit for every six subscribed units.
Canada Jetliners also intends to enter into a new agreement for a US$130,000 loan from an arms’ length third-party lender, priced at 7% per annum, with a maturity date of six months from the closing date, renewable for additional six-month term. The loan would be unsecured and the interest and principal would be payable at maturity. In case of loan renewal, only the interest needs to be paid.
The capital raised will be used for aircraft acquisition, general corporate and working capital purposes.
Do read our super exclusive interview with Canada Jetlines in the next edition of Airline Economics magazine.