AC and TRZ Agree to Terminate Arrangement

[ahramin]

TS pilots are in the process of voting on a LOU that will prevent layoffs for the next two months if it is ratified. Our group has seen many layoffs over the years and the company has been very resilient thought the many crisis it has survived. We are hoping for the best for us and all other pilot groups affected.

I don't see anything in LOU19 that prevents layoffs. It will hopefully reduce layoffs.

As for irrational ramblings, why are you feeding the trolls? Doesn't sound rational to me.

[TFTMB heavy]

TS pilots are in the process of voting on a LOU that will prevent layoffs for the next two months if it is ratified. Our group has seen many layoffs over the years and the company has been very resilient thought the many crisis it has survived. We are hoping for the best for us and all other pilot groups affected.

I don't see anything in LOU19 that prevents layoffs. It will hopefully reduce layoffs.

As for irrational ramblings, why are you feeding the trolls? Doesn't sound rational to me.

You are right about LOU 19, it did buy us until May 1 for now though as per the MEC's email. Things are evolving very quickly and who knows what will happen? Regardless, I'm glad the MEC is being proactive and that membership is reacting favourably.

I don't see that poster as a troll, more as someone that ignores the facts and is emotional about the merge. Nothing wrong with giving information, some reasonable people might appreciate it.

[iflyroads]

Rumblings of the deal being revisited or renegotiated.


This post is not meant to sow any discourse. Just passing on what I heard. I know the competition bureau is supposed to rule soon on it.

May just be a defferal on when it will close.

[tsgas]

Rumblings of the deal being revisited or renegotiated.


This post is not meant to sow any discourse. Just passing on what I heard. I know the competition bureau is supposed to rule soon on it.

May just be a defferal on when it will close.

If ever.

[C-GGGQ]

Keep hoping there bud.... TRZ was under 6$ this morning

It’s down from a couple of months ago yes but it’s still up over the last year and the last 5.

[Dockjock]

What’s stopping AC from going into the public market and buying shares at market price? The agreement is to buy all outstanding shares at $18. I’m not sure this is possible from a corporate governance standpoint, and an ownership stake above 10% would need to be disclosed as soon as it occurred (wouldn’t that be bullish), but say you liked something at $18, well you love it at $7. Buy buy buy. Also, would it not have been normal to hedge one’s offer with options? They do it with oil. Not sure how possible this is with a small Canadian company like TS. But if you commit to a price and then have to wait a year for it to close- hedge. Not sure if this occurred.

For the following reasons I think this proceeds.

Quebec politics
TS prospects if AC backs out (hugely negative)
AC optics for pulling away the life preserver
Quebec politics
Newish fleet
Take out a competitor
Need pilots (eventually)
AC can close rouge, park 767
If anything, merger of rouge/TS becomes easier with rouge shut earlier than expected. Use the crisis, get A330 at LCC (win for AC).
TS summer flying is toast
Quebec politics
Government decision to approve deal takes on new flavour, when alternative is failure of one of the parties or bailing out a company with very uncertain prospects going forward.


Complications
What if Sunwing fails- approving a merger of AC/TS would almost necessitate saving Sunwing. Maybe ONEX saves Sunwing?
Deal can definitely go through, but TS equity is worthless. Rovinescu does not have a history of losing. Could foresee a scenario where AC “saves” TS, cheers all around, Quebec government and oligarchs get their money and everyone else gets screwed.

[rudder]

What’s stopping AC from going into the public market and buying shares at market price? The agreement is to buy all outstanding shares at $18. I’m not sure this is possible from a corporate governance standpoint, and an ownership stake above 10% would need to be disclosed as soon as it occurred (wouldn’t that be bullish), but say you liked something at $18, well you love it at $7. Buy buy buy. Also, would it not have been normal to hedge one’s offer with options? They do it with oil. Not sure how possible this is with a small Canadian company like TS. But if you commit to a price and then have to wait a year for it to close- hedge. Not sure if this occurred.

For the following reasons I think this proceeds.

Quebec politics
TS prospects if AC backs out (hugely negative)
AC optics for pulling away the life preserver
Quebec politics
Newish fleet
Take out a competitor
Need pilots (eventually)
AC can close rouge, park 767
If anything, merger of rouge/TS becomes easier with rouge shut earlier than expected. Use the crisis, get A330 at LCC (win for AC).
TS summer flying is toast
Quebec politics
Government decision to approve deal takes on new flavour, when alternative is failure of one of the parties or bailing out a company with very uncertain prospects going forward.


Complications
What if Sunwing fails- approving a merger of AC/TS would almost necessitate saving Sunwing. Maybe ONEX saves Sunwing?
Deal can definitely go through, but TS equity is worthless. Rovinescu does not have a history of losing. Could foresee a scenario where AC “saves” TS, cheers all around, Quebec government and oligarchs get their money and everyone else gets screwed.

Depending on the terms of the airline aid portion of the the Federal COVID-19 economic package, AC could end up getting TS for free. AC pays $72OMM. The feds pay AC back through aid grants.

Sad part is the TRZ shareholders (including JM Eustache who holds 1% of the TRZ stock) get bailed out.

Welcome to politics.

[Sharklasers]

I think a painful merger is all but certain now for the reasons listed above.
Transat brings nothing to the table. No forward bookings, all that ‘cash’ they like to tell you about will be all burned through before this deal is ever approved.

[goldeneagle]

What’s stopping AC from going into the public market and buying shares at market price?

Purchase agreements of this type typically prohibit open market purchases after the deal is made public. If they were to start buying at this depressed price then there is a strong case for charges of insider trading because nobody knows the trajectory of the deal better than Air Canada executives.

[Jean-Pierre]

I wonder if the competition bureau report that was due today will be delayed. Sunwing being bankrupt or close to it must be a big consideration if they will allow AC to buy TS and essentially have a monopoly on that kind of vacation travel.

[mbav8r]

I wonder if the competition bureau report that was due today will be delayed. Sunwing being bankrupt or close to it must be a big consideration if they will allow AC to buy TS and essentially have a monopoly on that kind of vacation travel.

Curious, why do you say Sunwing is bankrupt or near? I have not read anything other than they stopped operation, likely to prevent this.

[rudder]

I wonder if the competition bureau report that was due today will be delayed. Sunwing being bankrupt or close to it must be a big consideration if they will allow AC to buy TS and essentially have a monopoly on that kind of vacation travel.

Curious, why do you say Sunwing is bankrupt or near? I have not read anything other than they stopped operation, likely to prevent this.

Sunwing is extremely exposed. So is Transat, although the TRZ Executives seem to be behaving as if their company is somehow immune.

In the case of Sunwing, it is entirely possible they will have zero operations until the fall. Think of that - zero revenue for up to 6 months. At the same time, significant overhead costs (leases/vendors/etc) and massive customer claims for cash refunds for cancelled vacations. The math equals a huge number. No idea how much cash on hand but as a privately held company (Hunter family/TUI), cash demands beyond cash on hand will be required from these 2 sources. Can they afford it? Are they even willing to pour that money in?

I am sure that many difficult and unimaginable strategic decisions are being made by SWG as we speak. Remember, the ultimate goal is survival. Live to fight again. Use all of the tools in the tool box.

TRZ should be acting similarly. However, it appears that the Executive suite have decided that removing 70% of staff from payroll should suffice. Makes one wonder what the little birds in YUL, YOW, and YQB have told TRZ about the future.

Time will tell.

[TFTMB heavy]

I wonder if the competition bureau report that was due today will be delayed. Sunwing being bankrupt or close to it must be a big consideration if they will allow AC to buy TS and essentially have a monopoly on that kind of vacation travel.

Curious, why do you say Sunwing is bankrupt or near? I have not read anything other than they stopped operation, likely to prevent this.

TRZ should be acting similarly. However, it appears that the Executive suite have decided that removing 70% of staff from payroll should suffice. Makes one wonder what the little birds in YUL, YOW, and YQB have told TRZ about the future.

⅔ of staff already laid off and the last flight will land on April 2, complete shutdown afterwards. What else do you want them to do beyond that?

[rudder]

⅔ of staff already laid off and the last flight will land on April 2, complete shutdown afterwards. What else do you want them to do beyond that?

Identify cash on hand. Estimate cash burn rate. Reduce cash burn rate (layoffs - done). Draw down available credit lines.

Call vendors. Negotiate payment deferrals. Cancel all non-critical expenditures.

Identify additional sources of liquidity (including but not limited to government assistance).

Contingency planning. Short term. Medium term. Long term.

I sense that the TRZ Executive (and shareholders) believe that they have a guaranteed way out of the current crisis. Perhaps that will be the case. I hope so for the TS staff. SWG employees don’t have that luxury.

But very little in life comes with a 100% guarantee.

[TFTMB heavy]

⅔ of staff already laid off and the last flight will land on April 2, complete shutdown afterwards. What else do you want them to do beyond that?

Identify cash on hand. Estimate cash burn rate. Reduce cash burn rate (layoffs - done). Draw down available credit lines.

Call vendors. Negotiate payment deferrals. Cancel all non-critical expenditures.

Identify additional sources of liquidity (including but not limited to government assistance).

Contingency planning. Short term. Medium term. Long term.

I sense that the TRZ Executive (and shareholders) believe that they have a guaranteed way out of the current crisis. Perhaps that will be the case. I hope so for the TS staff. SWG employees don’t have that luxury.

But very little in life comes with a 100% guarantee.

That is all being done. If you have a source of information that says otherwise, it's wrong. If it's your own deductions, you don't know what you're talking about.

[FL320]

⅔ of staff already laid off and the last flight will land on April 2, complete shutdown afterwards. What else do you want them to do beyond that?

Identify cash on hand. Estimate cash burn rate. Reduce cash burn rate (layoffs - done). Draw down available credit lines.

Call vendors. Negotiate payment deferrals. Cancel all non-critical expenditures.

Identify additional sources of liquidity (including but not limited to government assistance).

Contingency planning. Short term. Medium term. Long term.

....they did it weeks ago and I can tell you that payment deferrals have been approved for most of our fleet...the problem is that your comments are based on limited info.

But very little in life comes with a 100% guarantee.

this is also applicable to you...

[rudder]

I have read the corporate disclosures. So, I know what has been divulged externally. And yes, significant measures have been taken.

This thread was interrupted by a comment contrasting SWG to TS. That was the point of the reply.

SWG has no lifeboat. Where SWG ends up is exactly where TRZ would end up without the AC deal.

[airboy1]

I have read the corporate disclosures. So, I know what has been divulged externally. And yes, significant measures have been taken.

This thread was interrupted by a comment contrasting SWG to TS. That was the point of the reply.

SWG has no lifeboat. Where SWG ends up is exactly where TRZ would end up without the AC deal.

Agree, I believe the TRZ merge will occur to save it. AC will probably get a bailout package as a condition. Lucky TRZ shareholders!

[TFTMB heavy]

SWG has no lifeboat. Where SWG ends up is exactly where TRZ would end up without the AC deal.

You mean where they were before TUI stepped in?

[FL320]

I have read the corporate disclosures. So, I know what has been divulged externally. And yes, significant measures have been taken.

This thread was interrupted by a comment contrasting SWG to TS. That was the point of the reply.

SWG has no lifeboat. Where SWG ends up is exactly where TRZ would end up without the AC deal.

Agree, I believe the TRZ merge will occur to save it. AC will probably get a bailout package as a condition. Lucky TRZ shareholders!

It’s not too late to buy TRZ shares; they’re still at a discount price