Chorus Aviation Inc. provides update on its investment in South American regional airline – Pluna
HALIFAX, June 21, 2012 /CNW/ – Chorus Aviation Inc. (‘Chorus‘) (TSX: CHR.B CHR.A CHR.DB) today announced certain developments relating to Chorus’ investment in
Pluna Líneas Aéreas Uruguayas S.A. (‘Pluna’).
In April, 2010, Chorus (formerly the Jazz Air Income Fund) invested $15
million (USD) in Latin American Regional Aviation Holding Corp. (‘LARAH’) in return for a 33.3% non-voting equity interest in the company, which
translated into a 25% indirect ownership in Pluna. At the time of the
investment, LARAH held an indirect 75% equity interest in Pluna; the
Government of Uruguay held an indirect equity interest of 25%.
The Uruguayan government has taken control of Pluna, allowing the
airline to continue operating. Chorus is working directly and
cooperatively with the national government to produce and assess
potential recapitalization and business plans for Pluna. As part of the
proceedings, all of the shares in Pluna held indirectly by LARAH have
been delivered in trust with the Montevideo Stock Exchange in return
for certain conditions and indemnities from the Uruguayan government.
There can be no assurances as to the extent of Chorus’ participation
and involvement. Further, there can be no assurances that a successful
recapitalization of Pluna will be accomplished, and if so, that Chorus
will retain an equity stake or other investment therein.
Chorus is currently assessing the valuation of its original $15 million
investment and how it will be accounted for in its second quarter
financial disclosure planned for mid-August, 2012. The situation at
Pluna has no effect on Jazz operations or current cash flows. Chorus
will provide an update and share next steps upon the finalization of
the review and will not speculate on the outcome or Pluna’s future.
Caution regarding forward-looking information
This news release should be read in conjunction with Chorus’ unaudited
interim condensed consolidated financial statements for the three
months ended March 31, 2012 and MD&A dated May 14, 2012, filed with
Canadian Securities regulatory authorities (available at www.sedar.com).
Certain statements in this news release may contain statements which are
forward-looking. These forward-looking statements are identified by the
use of terms and phrases such as “anticipate”, “believe”, “could”,
“estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”,
“will”, “would”, and similar terms and phrases, including references to
assumptions. Such statements may involve but are not limited to
comments with respect to strategies, expectations, planned operations
or future actions.
Forward-looking statements relate to analyses and other information that
are based on forecasts of future results, estimates of amounts not yet
determinable and other uncertain events. Forward-looking statements, by
their nature, are based on assumptions, including those described
below, and are subject to important risks and uncertainties. Any
forecasts or forward-looking predictions or statements cannot be relied
upon due to, amongst other things, changing external events and general
uncertainties of the business. Such statements involve known and
unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements to differ materially from
those expressed in the forward-looking statements. Results indicated in
forward-looking statements may differ materially from actual results
for a number of reasons, including without limitation, risks relating
to Chorus’ relationship with Air Canada, risks relating to the airline
industry, energy prices, general industry, market, credit, and economic
conditions, competition, insurance issues and costs, supply issues,
war, terrorist attacks, epidemic diseases, acts of God, changes in
demand due to the seasonal nature of the business, the ability to
reduce operating costs and employee counts, secure financing, employee
relations, labour negotiations or disputes, restructuring, pension
issues, currency exchange and interest rates, leverage and restructure
covenants in future indebtedness, dilution of Chorus shareholders,
uncertainty of dividend payments, managing growth, changes in laws,
adverse regulatory developments or proceedings, pending and future
litigation and actions by third parties. The forward-looking statements
contained in this discussion represent Chorus’ expectations as of May
14, 2012, and are subject to change after such date. However, Chorus
disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise, except as required under applicable
About Chorus Aviation Inc.
Chorus Aviation Inc. (“Chorus”) was incorporated on September 27, 2010
and is a dividend-paying holding company which owns Jazz Aviation LP,
Chorus Leasing I Inc., Chorus Leasing II Inc., and Chorus Leasing III
Inc. (the leasing companies own the Q400 aircraft) and 7503695 Canada
Inc. (which holds Chorus’ investment in Latin American Regional
Aviation Holdings Corp., which in turn holds a 75% indirect equity
interest in South American regional carrier, Pluna).
Chorus is traded on the Toronto Stock Exchange under the trading symbols
of CHR.A, CHR.B and CHR.DB.
For more information, visit www.chorusaviation.ca
About Jazz Aviation LP
Jazz Aviation LP has a strong history in Canadian aviation with its
roots going back to the 1930s. Jazz is wholly owned by Chorus Aviation
Inc. and continues to generate some of the strongest operational and
financial results in the North American aviation industry.
There are two airline divisions operated by Jazz Aviation LP: Air
Canada Express and Jazz.
Air Canada Express: Under a capacity purchase agreement with Air
Canada, Jazz provides service to and from lower-density markets as well
as higher-density markets at off-peak times throughout Canada and to
and from certain destinations in the United States. Jazz currently
operates scheduled passenger service on behalf of Air Canada with over
790 departures per weekday to 83 destinations in Canada and in the
United States with a fleet of Canadian-made Bombardier aircraft.
Jazz: Under the Jazz brand, the airline offers charters throughout
North America with a dedicated fleet of five Bombardier aircraft for
corporate clients, governments, special interest groups and individuals
seeking more convenience. Jazz also has the ability to offer airline
operators services such as ground handling, dispatching, flight load
planning, training and consulting.
For more information, visit www.flyjazz.ca.