Chorus Aviation getting cash infusion

As the airline industry continues to struggle with plummeting passenger volumes and no government bailout plan, Halifax-based Chorus Aviation Inc. announced Tuesday a pair of transactions to provide the company with cash it needs during pandemic-related challenges, including a cash infusion by NordStar, the company that owns Torstar.

Chorus says it will receive gross proceeds of up to $130 million from a secondary offering and a private placement. Chorus also entered into agreements with Alberta Investment Management Corp. and Torstar owner NordStar Capital to purchase $15 million of units and $15 million of debentures.

NordStar founder Paul Rivett, who is the chair and co-proprietor of Torstar, called Chorus a “Canadian champion” focused on growth and presents a strong investment opportunity for NordStar.

“You’ve got the pandemic starting to end and you’ve got this pent-up demand for travel — that bodes well for their core business,” Rivett said. “But also they’ve got this opportunity to buy into leasing opportunities.”

Chorus Aviation is best known for its regional flight operations — Air Canada recently reached a deal to make Chorus’s Jazz Aviation subsidiary the exclusive operator of Air Canada Express flights. Another part of its business is buying and leasing aircraft to regional carriers around the world.

“What they’ve done though over the last five years is pivot to being a company that’s focused on growth,” Rivett said.

Net proceeds will be used to purchase additional aircraft to expand its regional aircraft leasing business and contracted flying operations, provide financial flexibility and repay debt, the company said.

“We are very pleased to be launching this capital raise enabling us to bolster the balance sheet and prudently move ahead with restarting our growth initiatives,” stated Chorus CEO Joe Randell.