Given the uncertainty related to the duration and impact of the COVID-19 pandemic, Chorus is suspending its dividend following payment of the previously declared dividend payable on April 17, the company said in a statement.
After payment of the March 2020 Dividend, no further dividends will be paid until further notice and the dividend reinvestment program (‘DRIP’) will also be suspended. The suspension of the dividend will preserve significant cash to strengthen the company’s balance sheet through this crisis it said.
In addition, Chorus has executed a letter of offer with Export Development Canada to provide an unsecured US$100 million revolving credit facility to be used for general corporate purposes, which further bolsters Chorus’ liquidity position.
The facility will be unsecured, repayable in two years, and contain customary covenants and events of default, including an event of default that would be triggered upon a change in control of Chorus.
The facility offered under this letter of offer remains subject to the satisfaction of customary conditions precedent to closing, including the negotiation and execution of a definitive loan agreement and the consent of the lenders under Chorus’ operating line of credit.
As reported previously, the Chorus has an existing C$100 million revolving operating facility, of which C$75 million is committed and C$25 million is uncommitted. This facility can be used to fund working capital at the Company and its Jazz and Voyageur subsidiaries. The Company currently has a drawn balance (including letters of credit) of approximately C$40 million.
Chorus is also in the process of raising approximately US$30 to US$50 million in financing to be secured by up to four unencumbered aircraft. These financings were first mentioned in Chorus’ news release dated March 18, 2020, and the range of anticipated proceeds has widened as the Company explores approaches to refinancing these unencumbered aircraft that could yield to lower proceeds but provide increased flexibility under certain existing loan agreements.
These financings are currently anticipated to close in the Company’s second fiscal quarter, subject to the negotiation and execution of definitive agreements and the satisfaction of conditions precedent to closing. There can be no assurance that these conditions will be satisfied.
In addition to the temporary layoffs noted earlier, Joe Randell, chief executive, will forgo 70% of his salary, and members of the executive team will forgo up to 50% of their salary.