=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/08/23/f= inancial1309EDT0102.DTL --------------------------------------------------------------------- Monday, August 23, 2004 (AP) Court approves Air Canada restructuring plan (08-23) 10:41 PDT TORONTO (AP) -- An Ontario court on Monday approved Air Canada's restructuring plan that is aimed at allowing the airline to emerge from bankruptcy by the end of September with a smaller work force and fleet, more international routes and plans to spin off some of its subsidiaries. Justice James Farley of Ontario Superior Court approved the plan for the airline which had entered bankruptcy protection April 1, 2003 after mounting losses. Air Canada's creditors voted more than 99 percent in favor last week to approve the restructuring plan. In June, Air Canada accepted an approximately $183 million investment proposal from New York firm Cerberus Capital Management for a 9.2 percent stake in the airline. The investment came atop an equity offering of about $621 million to be underwritten by Deutsche Bank. The plan will see creditors receive just pennies on the dollar for their debts. Air Canada has said potential claims were whittled down from $78 billion to as little as $6.1 billion. As part of its restructuring plan, the new Air Canada holding company plans to establish several of its units as stand-alone businesses. In addition to regional subsidiary Jazz and online travel business Destina, which are already established as on their own, Air Canada plans to spin off its technical services, cargo and ground handling operations into separate businesses or limited partnerships. The company is forecasting operating profits of $823 million on revenue = of $6.6 billion for 2004, and $1.2 billion on $6.8 billion in revenue in 2005. In a related move Monday, one of Canada's major banks sold its debt in t= he insolvent carrier and gained rights to buy up to 10 per cent of the voting shares of the restructured airline. CIBC said it had struck a deal to sell all its proven claims as an unsecured creditor of Air Canada to a third party for cash. The move will result in a pretax gain of about $39.5 million for the bank. CIBC also announced it had obtained rights to acquire voting shares of A= CE Aviation Holdings Inc., which will become the parent holding company of Air Canada when the reorganization is completed. The rights entitle CIBC to acquire between 3.4 million and 3.8 million voting shares of ACE at $20 a share, about 10 percent of ACE's outstanding voting shares. ---------------------------------------------------------------------- Copyright 2004 AP