Transat A.T. Inc. announces extension of its $250 million loan facility

MONTREAL, Feb. 18, 2021 /CNW Telbec/ - Transat A.T. Inc. ("Transat" or the "Corporation") announced today that it has extended the termination date of its $250 million short-term loan facility by three months. The facility had been arranged on October 10, 2020, with Export Development Canada and National Bank of Canada as lead arranger.

The loan facility will now terminate at the earliest date between June 30, 2021, and the closing of the arrangement with Air Canada (the "Arrangement"). It may still be drawn in tranches at any time before a date now set at May 31, 2021, subject to meeting the relevant prior conditions and applicable borrowing conditions. Those conditions have not been amended, and include certain requirements regarding freely available cash before and after drawing on the facility.

This extension provides the Corporation with additional room to manoeuvre in securing the financing that would be required before expiry of the credit facility, with the decision from the European Commission regarding the acquisition by Air Canada now expected during the first six months of 2021.

Caution regarding forward-looking statements

This news release contains certain forward-looking statements about Transat concerning a potential transaction involving the acquisition of all of the shares of Transat. These statements are based on certain assumptions deemed reasonable by Transat, but are subject to certain risks and uncertainties, several of which are outside the control of Transat, which may cause results to vary materially. Transat disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by securities laws.

In particular, the process to obtain the regulatory approval of the Commission is complicated by the COVID-19 pandemic and its impact on the international commercial aviation market. The market conditions of the global industry have been completely transformed. Among other things, the vast majority of North American, European and international air carriers have requested financial assistance measures, but have had to implement reductions in capacity (as the Corporation did). There can be no assurance that the Commission will approve the Arrangement, or that if it does, it will be with acceptable conditions, even if the Canadian authorities have approved the Arrangement.

Because the Outside Date has now been reached without being extended and the approval of the Commission is still outstanding, either party has the ability of terminating the agreement upon simple notice.

There are no assurances that the Arrangement will be completed on the terms and conditions described in the current Arrangement Agreement or at all. If the transaction proposed under the Arrangement is not completed for any reason, there is a risk that Transat's lenders, lessors, credit card processors, clients and other trade partners become more preoccupied by Transat's financial position, prospects and ability to execute its strategic plan as a going concern, which could result in more onerous credit terms, repayment obligations, an inability to refinance maturing indebtedness or find new sources of financing, restricted access to goods and services, and/or reduced business, all of which could significantly and adversely affect Transat's cash flows and ability to continue as a going concern.

In addition, failure to complete the transaction proposed under the Arrangement for any reason could materially negatively impact the market price of the Corporation's securities. If the transaction proposed under the Arrangement is not completed for any reason, there can be no assurance that management will be successful in its efforts to identify and implement other strategic alternatives that would be in the best interests of the Corporation and its stakeholders within the context of existing economic, market, regulatory and competitive conditions in the industries in which the Corporation operates, on favourable terms and timing or at all, and, if implemented, that such actions would have the intended results. Transat also has incurred significant transaction and related costs in connection with the transaction proposed under the Arrangement, and additional significant or unanticipated costs may be incurred.

About Transat A.T. Inc.

Transat A.T. Inc. is a leading integrated international tourism company specializing in holiday travel. It offers vacation packages, hotel stays and air travel under the Transat and Air Transat brands to some 60 destinations in more than 25 countries in the Americas and Europe. Transat is firmly committed to sustainable tourism development, as reflected in its multiple corporate responsibility initiatives over the past 14 years, and was awarded Travelife certification in 2018. Based in Montreal, the company has 5,000 employees (TSX: TRZ).

SOURCE Transat A.T. Inc.