Air Canada Provides Update on Restructuring and Recognizes Formation of Ad
Hoc Unsecured Creditors Committee
MONTREAL, May 8 /CNW Telbec/ - Air Canada provides the following update
on the airline's restructuring under the Companies' Creditors Arrangement Act:
Formation of Ad Hoc Unsecured Creditors Committee
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Air Canada has recognized the Ad Hoc Unsecured Creditors Committee
comprised of holders of in excess of $2.7 billion of Air Canada's unsecured
debt.
The Committee will have input into the CCAA restructuring process for the
purposes of formulating and discussing options to maximize recoveries
available to the unsecured creditors as a result of Air Canada's
restructuring. The Committee and its advisors will be part of discussions and
negotiations with respect to matters pertaining to Air Canada's restructuring
plan and any other material transactions proposed during the course of the
airline's restructuring. Meetings between the Committee and Air Canada have
commenced.
The Committee is comprised of 12 major industrial and financial
corporations from North America and Europe, including representatives of
certain bondholders, banks, lessors and trade creditors of Air Canada. A
representative of Airbus has been elected Chairman of the Committee.
"Air Canada believes that the Ad Hoc Unsecured Creditors Committee
provides an opportunity for its members and indirectly for Air Canada's other
unsecured creditors to have a single, well represented voice in the
restructuring process, while at the same time allowing management to focus its
efforts on the critical restructuring initiatives at hand," said Calin
Rovinescu, Chief Restructuring Officer of Air Canada.
"The Committee is appropriate to conduct this role as it is composed of
creditor constituencies that are of sufficient size and diversity to provide
the perspective of unsecured creditors in Air Canada's restructuring
proceedings."
The Committee has engaged KPMG Inc. as its financial advisor to provide
it with, amongst other things, business analysis, restructuring and valuation
advice.
Global Payments Decision
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In a decision rendered May 7, Mr. Justice J. Farley of the Superior Court
of Justice of Ontario dismissed a request by Global Payments for an order that
it was not required to continue the credit card processing services currently
provided by Global Payments or for the establishment of a reserve for its
potential financial exposure from providing such services. Mr. Justice Farley
instead ordered that Air Canada provide reasonable protection to Global
Payments with respect to the fees for providing such services. Global Payments
is therefore required to continue providing the credit card processing
services it currently provides to Air Canada subject to the parties
negotiating reasonable protection for its fees for providing such services.
Out of Court resolution of outstanding issues with NavCanada
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Air Canada late yesterday resolved outstanding matters with NavCanada
with respect to the payment scheduling issues raised in the motion brought
before Mr. Justice Farley on April 22, 2003.
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