Company Of Air Canada Seeks To Dissolve Operations
By Eddy Metcalf
February 13, 2012 - ACE Aviation Holdings Inc. (ACE)
reported full year and fourth quarter results for 2011
and announced its intention to seek shareholder approval
for its winding-up, the distribution of its remaining
net assets and ultimately its dissolution in the future.
ACE Aviation Holdings Inc. is a Canadian holding company
that provides commercial airline service and technical
support and was the parent company of Air Canada from
2004 until 2006. It is headquartered in Montreal. The
company was created as Air Canada emerged from
bankruptcy in 2004. One of the more significant changes
was the merging of its small airlines into Air Canada
and Air Canada Jazz.
the beginning of the year, ACE began preparing its
consolidated financial statements in accordance with
International Financial Reporting Standards ("IFRS"),
with retroactive restatement of comparative figures for
2010. In 2011, ACE adopted new accounting standard IFRS
9 - Financial Instruments. This required further changes
to the 2010 comparative figures.
ACE recorded a loss and reduction in net assets in liquidation
of $90 million. This includes unrealized losses of $76 million
and $5 million respectively on ACE's investment and warrants in
Air Canada. In the fourth quarter of 2011, ACE recorded a loss
and reduction in net assets in liquidation of $21 million. This
includes unrealized losses of $15 million and $1 million
respectively on ACE's investment and warrants in Air Canada.
ACE recorded income of $35 million in 2010, which included a gain on the sale of ACE's investment in Air Canada of $26 million, unrealized gains of $15 million on the investment, ACE's proportionate share of Air Canada's loss, after adjustments, of $14 million and an unrealized gain of $5 million on ACE's warrants in Air Canada.
fourth quarter of 2010, ACE recorded income of $61 million. This
included a gain on the sale of ACE's investment in Air Canada of
$26 million, unrealized gains of $15 million on the investment,
ACE's proportionate share of Air Canada's income, after
adjustments, of $21 million and an unrealized gain of $2 million
on ACE's warrants in Air Canada.
31, 2012, ACE's net assets amounted to $384 million or $11.83
per share. ACE's underlying assets are cash and cash equivalents
of $356 million; 31 million Class B Voting Shares in Air Canada
which had a market value of $33 million based on the January 31,
2012 closing price on the TSX; and 2.5 million warrants for the
purchase of Air Canada Class B voting shares at exercise prices
of $1.44 (1.25 million warrants) and $1.51 (1.25 million
warrants) per share which had a nominal value.
At that date, ACE
also had total payables and accrued liabilities of $5 million,
principally related to taxes. In March 2010, ACE applied for
Certificates of Discharge from the Canada Revenue Agency ("CRA") and
Since then, ACE
has been actively assisting the CRA and Revenu Quebec with their audits
of ACE's income tax returns for the years 2005 to 2010. In addition to
the audits of income tax returns, ACE has been assisting with audits in
respect of other taxes. The audits of income tax returns required a
detailed review of all of the significant corporate transactions
undertaken by ACE since its incorporation in 2004, together with a
detailed review of all of its returns.
The audits of
income taxes and other taxes are now substantially complete and
additional reassessments of $4 million are anticipated in Quarter 1,
2012. This amount has been accrued as at December 31, 2011. On the basis
of the information available, it is ACE's current expectation that the
Certificates of Discharge will be issued in the near future.
ACE will seek shareholder approval to wind up, distribute its net assets and ultimately dissolve. A shareholders meeting will be held on April 25, 2012 and shareholders of record as of March 6, 2012 will be entitled to receive notice of and to vote at the meeting.
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