07.09
With Air Canada increasing looking as though it will accomplish a number of
critical steps in the next few weeks, we expect there will be further events
that will affect ACE’s value mainly related to events at Air Canada and also
with our expectation that ACE may loan Air Canada up to $150 million.
Air Canada indicated as part of the Aeroplan financing agreement that it
was required to raise at least $600 million in new financing. We believe ACE
Aviation will be part of a consortium of lenders as other lenders will expect a
co-investment with them as a condition of their lending.
We expect ACE shares to come under pressure as transaction-oriented
investors looking for an exit through a SIB will be seeking to exit their
positions as the available cash is used for other purposes and a liquidation
scenario now appears unlikely to materialize in the near term.
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