Robert Milton, CEO of ACE Aviation Holdings at the company's annual general meeting in Montreal.John Morstad/The Globe and Mail
The roller coaster ride that came with holding Air Canada stock has finally come to an end for ACE Aviation Holdings, at quite the opportune time.
On Wednesday ACE announced the sale of every last one of its remaining shares – amounting to 11.5 per cent of Air Canada -- and warrants to Cormark Securities for about $58-million. The timing earned ACE a chunk of extra cash. Over roughly the past two months, Air Canada shares have popped about 75 per cent -- a move that comes after they lingered for much of the year.
No doubt, ACE has been planning this exit for some time. In February the company announced its intention to liquidate all of its holdings, and it applied to be delisted from the Toronto Stock Exchange in July. Plus, ACE reduced its equity stake in Air Canada to the 11 per cent mark through a $163-million bought deal in December 2010 – again, after the stock went on a big run.
It appears that Cormark bought the remaining shares and warrants at a fair market value. The stock opened at $1.83 Wednesday, which means the 31 million shares sold were worth $56.7-million. Assuming an arbitrary 40 per cent volatility, the warrants are worth just over $1-million.
ACE received the warrants for participating in a lending facility in 2009, as well as for buying more shares the same year.
Tim Kiladze