Private equity and pension funds interested in buying Air Canada
Feb. 8, 2008, Montreal - ACE Aviation Holdings Inc., the parent company of Air Canada, says it has been approached by private equity and pension funds to buy Canada's largest airline.
February 8, 2008 By Carey Fredericks
Feb. 8, 2008, Montreal – ACE Aviation Holdings Inc., the parent company of Air Canada, says it has been approached by private equity and pension funds to buy Canada's largest airline.
ACE chief executive Robert Milton says it would make sense for a U.S. carrier to partner with Air Canada given the impending consolidation in the United States.
A number of U.S. airline companies, such as Delta and Northwest, have been considering mergers to cut costs and deal with the slump in their business because of the looming U.S. recession.
In a conference call today, Milton said the Air Canada parent has been approached by unnamed private equity and pension funds to buy the Montreal-based carrier. He says anyone who ties up with Air Canada would get a unique piece of geography.
ACE, which owns 75 per cent of Air Canada, has been looking for ways to cash out its stake in the airline. It had hoped to wind up its operations by the second quarter by selling off its remaining stakes in the Aeroplan Income Fund, Jazz Income Fund, service company ACTS and Air Canada.
But deteriorating global prices for airlines could affect that timing and how it proceeds, Milton told analysts. Canadian law restricts foreign ownership of airlines to 25 per cent. The board must also be governed by a majority of Canadians.