Canadian company Chorus Aviation said on December 14 it would redeem the remaining US $115 million principal amount of its 6.00% senior debentures due December 31, with the redemption expected to close "on or about" the day before.
The debentures will be redeemed at par, or US $1,000 for each US $1,000 principal amount of debentures, plus accrued and unpaid interest until but excluding the redemption date. They are to be secured "by certain Dash 8-100 and Dash 8-300 aircraft and real estate property owned by Chorus' subsidiaries", which is to be released after the redemption.
"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", Chorus announced.
The redemption is be funded by the US $53.5 million net proceeds from a recently-completed sale of two wholly-owned aircraft by its subsidiary, Falko Regional Aircraft, as well as "available cash resources", Chorus said.
The redemption and th sales were "not expected to materially change" Chorus's November 2022 financial forecast.