The Canada Business Emergency Financing Corporation continues to protect Canadian jobs with the latest loan from the Emergency Financing Facility for Large Employers to Transat

TORONTO, July 29, 2022 /CNW/ – Today, Canada Business Emergency Financing Corporation (CEEFC), a wholly-owned subsidiary of Canada Development Investment Corporation (CDEV), announced an additional loan to Transat AT Inc. . (“Transat”) under the Large Employer Emergency Financing Facility (LEEFF) to protect jobs in from Canada air sector.

This loan closes a request filed by Transat at the height of the Omicron wave, which hit the company’s income and workers hard.

To date, the CEEFC has stopped accept new LEEFF applications, reflecting from Canada a strong economic recovery from the pandemic and the fact that no new applications for LEEFF loans have been received from Canadian companies, with the exception of Transat, over the past year. The LEEFF application period is now closed.

Since its founding in 1987, Transat has become a major employer in Montreal and across Canada as from Canada third-largest airline, with more than 3,000 active employees. This loan agreement obliges Transat to maintain its workforce. As an additional requirement to this loan, Transat is required to follow the Air Passenger Bill of Rights.

Under this latest LEEFF loan, Transat will receive up to $150 million to protect Canadian jobs and ensure continued operations, despite the company’s ongoing capital operating challenges due to the pandemic. The amount consists of an initial loan of $100 million in LEEFF loans and another loan of $50 million conditional on Transat raising third-party financing (equal dollar for dollar up to $50 million).

Following the first LEEFF loan to Transat in April 2021thousands of Canadian jobs were protected and the company was able to maintain operations.

LEEFF recipients, including Transat, must commit to protecting jobs and supporting their domestic business operations, and must demonstrate that LEEFF funding is part of their overall plan to return to financial stability. LEEFF’s terms also impose strict limits on executive compensation and prohibit the payment of dividends and other distributions by a loan recipient.

Lazard acted as sole financial advisor to CEEFC for this transaction. Torys LLP acted as legal counsel to CEEFC.

Fast facts

  • The LEEFF program was open to all large, for-profit Canadian employers who have been impacted by the pandemic.
  • To be eligible for LEEFF, a company had to have more than $300 million of annual income and require a loan of at least $60 million.
  • All LEEFF grantees are subject to specific operational requirements while the loan is in progress, including:
    • Prohibitions on dividends, capital distributions and share redemptions; and,
    • Restrictions on executive compensation.
  • Companies that receive funding through LEEFF are required to commit to publishing annual climate-related disclosure reports in accordance with the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures, including how their future operations will support environmental sustainability and national climate goals.
  • The companies agree to maintain their domestic operations and to make all commercially reasonable efforts to maintain their workforce.
  • LEEFF key terms can be found at
  • A list of approved LEEFF funding is available at

Additional disclosure

CEEFC is a federal Crown corporation, incorporated in May 2020 under the Canada Business Corporations Act and is wholly owned by CDEV, a parent Crown corporation. CEEFC is responsible for the administration of LEEFF.

Transat issued to CEEFC a total of 4,687,500 warrants (the “Tranche 2 Warrants”) in consideration for the completion by CEEFC of the $80 million unsecured loan (the “Unsecured Loan Facility” and with a $20 million renewable guarantee, the “loan facilities”) available to Transat. Immediately prior to the issuance of the Tranche 2 Warrants, CEEFC and its affiliates held 13,000,000 warrants exercisable for 13,000,000 Class B Voting Shares (each, a “Class B Share”) of Transat (the BSA Tranche 1″ and together with the BSA Tranche 2, the “BSA”). Immediately after the issue of the BSA Tranche 2, CEEFC holds 17,687,500 Warrants exercisable for 17,687,500 Class B shares representing 31.9% of the total number of outstanding Class A Variable Voting Shares (each, a “Class A Share”) of Transat and Class B Sharessubject to the limitations described below.

Each Tranche 2 Warrant entitles CEEFC to purchase one Class B Share at an exercise price of $3.20 per Class B Share (the “Exercise Price”) or, at CEEFC’s option, by means of a “cashless exercise”. The total number of Class B shares issuable upon exercise of the Tranche 2 Warrants is 4,687,500 Class B Shares, assuming that CEEFC does not own or exercise control over any Class B Shares or Class A Shares (collectively, the “Voting Shares”) at the time of exercise , representing 11.0% of total number of Class A Shares and Class B Shares outstanding. In the event that the number of Class B Shares to be issued upon exercise of the Tranche 2 Warrants exceeds the lesser of (i) 4,687,500 and, (ii) the number of Class B shares which, when added to the number of Class B shares owned or controlled by CEEFC at the time of exercise, equals 19.9% ​​of the number of Class A Shares and Class B Shares Outstanding, in Total, Including the Issuance of the Class B Shares Pursuant to the Exercise of the Warrants, instead of issuing Class B Shares in excess of this amount, the excess Warrants exercised will be settled by cash payment to CEEFC in accordance with the terms of Tranche 2 of the Warrants. Due to similar limitations in the Tranche 1 Warrants, at no time will the exercise of the Warrants by CEEFC result in CEEFC beneficially owning or controlling more than 19.9% ​​of the number of Warrants. Class A Shares and Class B Shares outstanding, in aggregate.

Tranche 2 warrants will vest (“vested warrants”) in proportion to the drawdown of the unsecured loan facility during the period of availability until October 29, 2023. Purchased Warrants may be exercised, in whole or in part, at any time prior to 5:00 p.m. on July 29, 2032 (the “Expiration Period”), provided that only half of the Warrants acquired may be exercised before December 31, 2023. Half of the warrants acquired will be canceled if the unsecured loan facility is repaid before December 31, 2023.

CEEFC is not authorized to transfer any Class B shares issuable upon exercise of the Tranche 2 Warrants prior to November 30, 2022 in accordance with applicable securities laws, subject to certain exceptions. CEEFC is not permitted to transfer any Tranche 2 Warrants prior to repayment of the Loan Facilities.

CEEFC intends to hold the Tranche 2 Warrants for investment purposes. Depending on market conditions and other factors, including Transat’s business and financial situation, CEEFC may dispose of some or all of the Transat securities it holds. CEEFC and its affiliates do not intend to acquire additional equity securities of Transat, except by (i) the possible exercise of the Tranche 2 Warrants and (ii) the possible acquisition of additional warrants in consideration for additional unsecured loan facilities in an amount of up to $40,000,000 or pursuant to rights under the Loan Facilities to provide additional financing on the same terms as an equity investment of a third party.

An alert report will be filed by CEEFC in accordance with applicable securities laws and will be available on SEDAR at or can be obtained directly from the CEEFC on request from Noreen Flaherty at 416-966-2221.

SOURCE Canada Enterprise Emergency Funding Corporation

For further information: For media inquiries, please contact: Canada Business Emergency Financing Corporation, Media Relations Team, [email protected]

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