Discovery Air Inc. (TSX: DA.DB.A), a portfolio company of Clairvest Group Inc. (TSX: CVG) has filed for protection under the Companies’ Creditors Arrangement Act (CCAA). KSV Kofman Inc. has been appointed as the CCAA monitor.
The principal purpose of the CCAA proceedings is to allow Discovery Air to conduct a Court-supervised sale process for its equity interest in its wholly-owned subsidiaries, Great Slave Helicopters Ltd., Air Tindi Ltd. and Discovery Mining Services Ltd. and its residual interest in its former defence business, Top Aces.
None of the subsidiaries have filed for CCAA protection. Each have the benefit of a stay of proceedings to prevent creditor actions against them as a result of the Corporation’s filing for CCAA protection. All of the subsidiaries will continue to operate during the CCAA proceedings, and obligations to employees and suppliers of goods and services will continue to be met in the ordinary course.
Clairvest Group Inc. and its affiliates have submitted bids to purchase above-described equity interests as stalking horse purchasers. Unless superior transactions to any of the four transactions are consummated during the CCAA proceedings, the transactions will be completed, subject to Court approval.
Clairvest has also agreed to provide funding to Discovery Air during these proceedings pursuant to a Court-approved debtor-in-possession (DIP) financing facility.
On May 26, 2017, Clairvest Group Inc. affiliates along with certain management shareholders closed privatization of Discovery Air.
As of October 31, 2017, Discovery Air reported $[mepr-active rule=”374″ ifallowed=”hide”]#SUBSCRIBERS ONLY CONTENT Where did you get your news today? Get insights and see our research on this and all other subscriber ONLY news. Subscribe today and see what you have been missing and be informed.#[/mepr-active][mepr-active rule=”374″]263 million in liability, consisting of 55 million in operating line of credit, $26 million in trade and payables, $5 million in loans and borrowings scheduled repayments, and $177 million in current portion of loans and borrowings. $154.2 million of debt matures within twelve months. The majority of the debt is held by Clairvest.
The DIP facility for up to $12.6 million is made available by CEP IV Co-Investment Limited Partnership pursuant to a DIP term sheet dated March 21, 2018.
Discovery Air secured debtholders are as follow:
Clairvest – $72.7 million maturing May 5, 2018
CIBC $14.8 million maturing April 30, 2018
ECN Aviation Inc. (Element) – $8.6 million maturing April 1, 2020
Roynat – $5.1 million maturing April 15, 2018
Textron Financial Corporation – $13.1 million maturing April 1, 2023
Unsecured Listed debentures maturing on June 30, 2018: $34.5 million (plus over $1.4 million interest) in unsecured bond debt principal to public bondholders.
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photo credit: Discovery Air