The Offering is scheduled to close in three separate tranches. The first settlement will occur within two business days of the approval of the Neo Exchange Inc. This first tranche will see the Investor purchase 19,598,017 Shares, equal to approximately 19.9% of the issued and outstanding shares of Canada Jetlines, for an aggregate purchase price of $3,373,313.
Canada Jetlines says it intends to use the money to expand its fleet with another aircraft. Jetstream does not currently hold any shares and when all the financing has been given it will own approximately 50% of the struggling airline.
The completion of the second and third tranches shall require shareholder approval under the rules and policies of exchange and Canada Jetlines says it will seek approval at a special meeting of shareholders that will be scheduled promptly to occur in Ontario. If all is approved at the end of the transaction Jetstream Aviation will hold 78,431,287 Shares of the airline, representing approximately 50% of the firm.
As part of the transaction, the Investor will have the right to nominate two directors to the Board of Directors of the Company. The first director will be nominated concurrent with the closing of the second tranche of the offering. The second director will be nominated concurrent with the closing of the third tranche of the offering.
Canada Jetlines currently has a fleet of 3 Airbus A320s aircraft and flies mostly charter services for local sports teams and limited scheduled flights to holiday hotspots of Jamaica, Mexico, Las Vegas and Florida. The carrier has a published target of 15 jets by 2025, however, that plan seems increasingly unlikely and to facilitate such an increase the airline is said to need a further $50 million.