ACE Aviation Holdings Inc. will be hanging onto Air Canada for longer than originally planned, ACE chairman and chief executive officer Robert Milton said Friday.
Amid record high fuel prices, Air Canada shares have slumped, trading nearly 60 per cent lower than their initial public offering price of $21 in November, 2006.
Montreal-based ACE, which currently owns 75 per cent of the airline, has been fielding expressions of interest from potential buyers, but Mr. Milton cautioned that he doesn't envisage any quick deal.
“I think that given in particular fuel prices, the likelihood of something happening imminently with Air Canada vis a vis a sale is low. But we're going to continue to monitor the situation and keep all our options open,” he told industry analysts during a conference call.
As far back as the holding company's annual meeting a year ago, ACE officials said they had hoped to wind down and sell stakes in various divisions by the spring of 2008. Mr. Milton said in an interview with The Globe and Mail two years ago that he wanted to “illuminate” Air Canada through an IPO, because investors didn't see the value within the airline.
Asked whether ACE could sell its remaining Air Canada interest within three to six months, Mr. Milton said yesterday that “is definitely the intention.”
On Friday, ACE said it will be buying back $500-million of its own shares, another step in its plan to gradually delist from the Toronto Stock Exchange, and let its divisions go it alone.
ACE is expected to sell its remaining 9.9 per cent stake in Aeroplan Income Fund and 9.5 per cent stake in Jazz Air Income Fund within weeks.
ACE reported Friday that it lost $182-million in the first quarter, including a $125-million provision related to allegations of cargo price-fixing by an array of global airlines. The latest ACE loss was wider than the $72-million loss in the first quarter of 2007. Its share loss was $2.96, compared with 70 cents, while revenue rose to $2.73-billion from $2.63-billion.
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