VANCOUVER, British Columbia, June 06, 2019 (GLOBE NEWSWIRE) -- Canada Jetlines Ltd. (JET: TSX-V; JETMF: OTCQB) (the “Company” or “Jetlines”) is pleased to provide an update on the status of the $7 million financing (the “InHarv Offering”) with InHarv Partners Ltd. (“InHarv”), on behalf of InHarv ULCC Growth. The TSX Venture Exchange (“TSXV”) is requiring that the Company obtain shareholder approval for the Offering. The Company has submitted the InHarv Offering for shareholder approval at its upcoming Annual General and Special Meeting scheduled for Wednesday, June 26, 2019 (the “AGM”). Assuming shareholder approval for the InHarv Offering, InHarv and the Company intend to close the InHarv Offering as soon as possible after the AGM. For further information regarding the InHarv Offering please refer to the Company’s press release dated March 28, 2019 and May 15, 2019, or the Information Circular (defined below).
The AGM will be held at Fasken Martineau DuMoulin LLP located at 2900 – 550 Burrard Street, Vancouver, BC Canada, V6C 0A3 on Wednesday, June 26, 2019 at 10:00 a.m. (Vancouver Time). In addition to the approval of the InHarv Offering, the Company will also be submitting certain other financing, regulatory and executive compensation matters to shareholders for approval. An information circular (the “Information Circular”) detailing the matters submitted to the shareholders for approval at the AGM is available on SEDAR at www.sedar.com.
On November 27, 2018, the Company entered into a subscription agreement with SmartLynx Airlines SIA (“SmartLynx”) pursuant to which SmartLynx would purchase 22,727,272 subscription receipts at a price of $0.33 per Subscription Receipt, for aggregate gross proceeds of $7.5 million. On December 27, 2018, the Company announced that it had closed the SmartLynx Private Placement and that the $7.5 million subscription funds, together with any interest earned thereon, are held in escrow pending satisfaction or waiver of the escrow release conditions.
A control position will potentially result from the conversion of the subscription receipts acquired by SmartLynx. As a result, and as required by the policies of the TSXV, shareholders will be asked at the AGM to approve, by way of ordinary resolution, the creation of a control position resulting from the subscription for 22,727,272 subscription receipts by SmartLynx. For further information regarding the SmartLynx Offering please refer to the Company’s press release dated November 27, 2018, December 27, 2018, and April 30, 2019, and the Information Circular.
Article and By-Law Amendments
On November 3, 2016, the Honourable Marc Garneau, Minister of Transport, granted the Company an unprecedented exemption from the 25 per cent foreign voting interest limit in the Canada Transportation Act (“CTA”) and be permitted the Company and its subsidiaries to have up to an aggregate of 49 per cent foreign voting interests. Subsequent to granting the exemption order, on June 27, 2018, Minister Garneau announced that, following the Royal Assent of the Transportation Modernization Act, new rules for airline ownership have officially come into force (the “CTA Amendments”). These changes increased foreign voting interest limits from 25 per cent to 49 per cent of voting interests for all Canadian air carriers. A single international investor (individually or in affiliation) cannot hold more than 25 per cent of the voting interests of a Canadian air carrier, and no combination of international air carriers can own more than 25 per cent of a Canadian carrier (individually or in affiliation).
As the CTA Amendments are now in force, the Board determined that it was appropriate to address the changes to the new limitations on voting control by non-Canadians under the CTA Amendments by effecting amendments to the Articles and By-Law No. 1 of the Company. The amendments to the Articles and By-Law No. 1 will require Shareholder approval, which the Company intends to obtain at the AGM. For further information please refer to the Information Circular.
The closing of the InHarv Offering is conditional upon the satisfaction of conditions to closing contained in the Subscription Agreement. These conditions include, among other things, approval of the TSX Venture Exchange for the Offering, shareholder approval and the receipt of all other necessary consents, approvals and authorizations required by either party.
About Canada Jetlines Ltd.
Canada Jetlines is set to become Canada’s first true Ultra-Low Cost Carrier (ULCC) airline, with plans to operate flights across Canada and provide non-stop service from Canada to the United States, Mexico and the Caribbean. The Company plans to commence operations with the Airbus A320 fleet, the most widely used aircraft for ultra-low cost carriers worldwide. Jetlines is led by a board and management team with extensive experience and expertise in low-cost airlines, start-ups and capital markets. The Company was granted an unprecedented exemption from the Government of Canada that will permit it to conduct domestic air services while having up to 49% foreign voting interests.
For more information on Jetlines, please visit our website at www.jetlines.ca.
ON BEHALF OF THE BOARD
"Mark J. Morabito"
Canada Jetlines is part of the King & Bay group of companies. King & Bay is a merchant bank that specializes in identifying, funding, developing and supporting growth opportunities in the resource, aviation, and technology sectors.
For more information, please contact:
Toll Free: 1-833-226-5387
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" concerning anticipated developments and events that may occur in the future. Forward-looking information contained in this news release includes, but is not limited to, statements with respect to (i) the commencement of operations and the success of expected future operations of the Company; (ii) the completion of the InHarv Offering; (iii) the approval of the matters submitted to shareholders at the AGM; and (v) the satisfaction of the conditions to closing of the InHarv Offering.
In certain cases, forward-looking information can be identified by the use of words such as "plans", "expects" "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or " or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the satisfaction of the conditions to closing of the Offering, the satisfaction of the escrow release conditions, the terms contained in the executed agreements to be entered into by the Company or its subsidiaries with the SPV, the receipt of financing to commence airline operations, the accuracy, reliability and success of the Jetlines’ business model; the timely receipt of governmental approvals; the timely commencement of operations by Jetlines and the success of such operations; the legislative and regulatory environments of the jurisdictions where the Jetlines will carry on business or have operations; the impact of competition and the competitive response to the Jetlines’ business strategy; and the availability of aircraft. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks related to, the ability to obtain financing at acceptable terms, the impact of general economic conditions, domestic and international airline industry conditions, future relations with the SPV, volatility of fuel prices, increases in operating costs, terrorism, pandemics, natural disasters, currency fluctuations, interest rates, risks specific to the airline industry, the ability of management to implement Jetlines’ operational strategy, the ability to attract qualified management and staff, labour disputes, regulatory risks, including risks relating to the acquisition of the necessary licenses and permits; risks related to disputes under the agreement with Boeing to acquire 737-Max aircraft, and the additional risks identified in the "Risk Factors" section of the Company's reports and filings with applicable Canadian securities regulators. There is no assurance that the closing of the Offering will occur. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this news release. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has reviewed or accepts responsibility for the adequacy or accuracy of this release.