Air Canada To Raise C$850M To Improve Its Cash Position; Appoints Amos Kazzaz As CFO
Anna Kroupina, Open Jaw
Air Canada is looking to raise C$850 million in a share offering, after it warned of a higher cash burn in the fourth quarter. AC expects an average net cash burn of between $14 million and $16 million per day in Q4, compared with its prior estimate of $12 million to $14 million.
"The increase in projected net cash burn results equally from both lower than expected travel bookings in the first quarter of 2021 and timing of cash receipts from various sources now expected to be received in the first half of 2021," the company said in a statement.
The statement added that Air Canada intends to use the net proceeds from the stock offering to supplement the company's working capital and for other general corporate purposes. The net proceeds will serve to increase Air Canada's cash position, thereby allowing for additional flexibility both from an operational standpoint and in the implementation of its planned mitigation and recovery measures in response to the COVID-19 pandemic.
One of those corporate purposes might be for the purchase of Transat. Air Canada’s offer of $5 per share For the purchase of the airline was approved Tuesday by Transat shareholders. Transat says it would have faced an uncertain future if the deal, expected to close in early 2021, hadn't gone through. In OCT, Air Canada brought down its offering from $18 per share to $5, reflecting the new market reality for travel-related industries since the start of the pandemic.
Amos Kazzaz Named CFO
In a separate move, Air Canada announced the appointment Tuesday of Amos Kazzaz as Executive Vice President and Chief Financial Officer, effective 15FEB, 2021. Kazzaz is currently the airline's Senior Vice President, Finance, and is based at Air Canada's Montreal headquarters.
As CFO, Kazzaz will oversee AC's overall financial strategic direction, comprising all aspects of financial reporting and planning, investor relations, treasury and controller's operations, taxation, pension administration, internal audit, fleet, procurement and corporate real estate.
Anna Kroupina Journalist
Anna is OJ's newest member and she joins the team as a writer/reporter. She co-writes the daily news and covers events. Although she's new to the industry, pursuing a career path in travel/tourism has been a goal since her first family road trip to the Florida Keys sparked a desire to discover the world and this exhilarating, fast-paced industry.