Canadian North, First Air Plan 'merger Of Equals'

[AME]

Given their Native connections I wonder if they will adopt "First Canadian" as the name for the merged airline?

http://www.cbc.ca/news/canada/north/canadian-north-first-air-plan-merger-of-equals-1.2607324

The owners of Canadian North and First Air have confirmed they are proposing to merge the two northern airlines.

NorTerra Inc. and Makivik Corporation issued a joint news release Friday saying they are in talks that could lead to a "merger of equals, subject to the successful conclusion of negotiations and regulatory review."

[W5]

Weren't there "discussions" to that effect last year?

[blues deville]

Isn't a merger usually a method of gaining market share against the competition? What's the reason behind this one? Do they need to bury the First Air name?

[Guest longtimer]

New facilities planned for Canadian North Training.

Canadian North Announces New Pilot Training Centre in Edmonton

Apr 30

Posted by briandunnyyz

.

20140428

EDMONTON, ALBERTA–Canadian North proudly announces that it is establishing a new Pilot Training Centre at Edmonton International Airport (EIA). The new Pilot Training Centre will house a CAE-built Boeing 737 full-flight simulator. The simulator and facility are planned to be operational and certified by Transport Canada this fall. The centre is located on site at Edmonton International Airport, south of Airport Road. Training of the first pilots will coincide with the completion of facility construction and simulator set-up. “Canadian North has grown to the size where investing in its own flight simulator just makes sense,” said Steve Hankirk, President of Canadian North. “We are pleased to be working with EIA on this initiative as we know it will have a positive impact on both Canadian North and the economy of the Edmonton region.” The 737 simulator will bring new cost efficiencies for training pilots at Canadian North. Additionally, pilots will now have the option of coming to Edmonton for simulator training, rather than going to other training centres around North America. The new facility will mean added business for local hotels and restaurants.

Canadian North’s new Pilot Training Centre at EIA will also offer 737 training to other airlines interested in using the facility. “This new centre will draw even more people and more business to our region. It is a perfect example of the aerotropolis concept, where businesses situated at or near EIA work in conjunction with EIA to create a catalyst for growing our community. We are pleased to have an innovative company like Canadian North creating more jobs in our region through new airport development,” says Tom Ruth, President and CEO of Edmonton International Airport. CAE, a world-leader in commercial aviation simulator technology has signed a maintenance services contract with Canadian North and is providing its training centre with operations expertise. A ribbon cutting ceremony is being planned for this fall, once the new facility is open and operational.

http://canadianaviationnews.wordpress.com/2014/04/30/canadian-north-announces-new-pilot-training-centre-in-edmonton/

[Guest]

First came the collapse of the code share and now this could be in their future.http://www.cbc.ca/news/canada/north/debt-canadian-north-ntcl-1.3898484?cmp=rss

$140M debt, which NTCL can't repay, could spread to Canadian North

Other Norterra subsidiaries guaranteed NTCL's debt... and are legally obligated to repay it

By Guy Quenneville, CBC News Posted: Dec 16, 2016 6:00 AM CT Last Updated: Dec 16, 2016 6:00 AM CT

Norterra subsidiaries like NTCL - but also Canadian North - guaranteed the loans totalling $140 million that Norterra obtained from banks, making them all responsible for paying back that debt. (Patrick Nagle/CBC)

 

Related Stories

•  
• 'We're here to stay': Canadian North defends viability post-codeshare
• Canadian North calls First Air codeshare drop a 'sudden, unilateral' decision
•  

With Northern Transportation Company Ltd. unable to pay back an overwhelming majority of its debt, the balance may now fall on other Norterra companies, including Canadian North.

Norterra, NTCL's Inuvialuit-owned holding company, has borrowed $140 million (up from a previous estimate of $130 million) from a trio of banks: the Bank of Nova Scotia, HSBC Bank of Canada and Canadian Western Bank. Norterra advanced money from those loans to subsidiaries like Canadian North and Weldco-Beales Manufacturing.

According to an August 2016 report from NTCL's court-appointed monitor, all of the Norterra subsidiaries guaranteed that debt and "are legally obligated to pay the full amount of Norterra indebtedness."

"Based on that statement, it would appear that Canadian North, being one of the subsidiaries, could be liable for anything owing to the [banks]," says Andy Fisher, a bankruptcy expert and licensed insolvency professional at A. Farber & Partners in Toronto. 

"The banks, if they have other entities — like in this case, subsidiaries that have guaranteed the bank's loans — they will look to those other guarantors to try and recover the money that's owed."

• Canadian North calls First Air codeshare drop a 'sudden, unilateral' decision
• Competition Bureau goes to court to get information from Canadian North, First Air

Banks don't want costly legal battle 

While the banks could send demand letters to Canadian North, they are unlikely to pounce aggressively initially, says Fisher.

"They're probably going to want to enter into a discussion with the subsidiaries to see what options are available for a repayment plan," he says. "If they can work out an agreement that's amicable for both sides, that's generally their first choice. They don't want to get into a legal battle and run up their legal costs."

And if an amicable agreement can't be reached? Canadian North and Weldco-Beales Manufacturing would have the option of filing for court protection from creditors (as NTCL has), says Fisher.   

Canadian North's president, Steve Hankirk, centre, maintained earlier this month that the airline should not be affected by NTCL's financial woes. (CBC)

Canadian North did not respond to multiple requests for comments.

But during a press conference earlier this month about the airline's codeshare split from First Air, Steve Hankirk, Canadian North's president, said Canadian North shouldn't be affected by NTCL's financial woes.

"Certainly [it's] in everybody's head, but one thing we have been signaled is the two very profitable businesses, ourselves and the Weldco Companies, are on the shareholders' minds and they're 150 per cent behind us," Hankirk said.

• 'We're here to stay': Canadian North defends viability post-codeshare

"The other companies under the umbrella have not been affected," Kyle Barsi, NTCL's vice president of finance, wrote CBC News via email Wednesday. "The matter is before the courts and we can't comment any further at the time."

Tom Cumming, a lawyer with Gowling WLG who is representing the banks, would not comment on the banks' next steps, citing confidentiality obligations.   

NTCL sold what it could, raising only $13M 

Whether the banks begin circling Canadian North will become more and more pertinent now that NTCL has sold off what it could prior to its imminent bankruptcy or dissolution. 

The company sold some ships and barges earlier this year to various groups for a combined $5.8 million. And on Thursday an Alberta court approved a further $7.5-million purchase by the N.W.T. government of the Hay River shipyard, 12 ships and 72 barges — the last of NTCL's viable assets.

• Court approves N.W.T. gov't purchase of NTCL assets for around $7.5M

That makes for a total of $13.3 million which, according to a settlement reached Thursday, will be split between the banks and NTCL pension holders. (That's well below what NTCL's assets were said to be worth in May: $44.9 million.) 

If it's an even split between the banks and the pensioners, that still leaves more than $130 million owed to the banks, swinging the focus back to the other Norterra subsidiaries.

"They're not in play from us, but I suppose potentially by the syndicate," says Susan Philpott, the lawyer for one of the unions representing pension holders. 

[rudder]

The lenders will want to be paid. Sounds like joint and several liability. Regardless, no wholly owned subsidiary can claim financial immunity from the debts of the holding company, particularly when that company is in court supervised creditor protection.

Having said that, the lenders will not want to settle for just pennies on the dollar so determining whether the subsidiaries should continue on a going concern basis will be a consideration. The lenders could petition for them to be sold in an attempt to recover monies owed.

The President of Canadian North seems to be relying on the wishes of the shareholders whom have already surrendered control of the company to the court. That would be misplaced trust.

If the secured creditors have liens in place then they can ask the court to enforce the liens. And if the fate of the holding company is to be determined in a restructuring plan, then it will be the unsecured creditors that will decide whether it will be going concern or liquidation. The Norterra shareholders have no say and I suspect will see their stake wiped out.

[Guest]

3 hours ago, rudder said:

The lenders will want to be paid. Sounds like joint and several liability. Regardless, no wholly owned subsidiary can claim financial immunity from the debts of the holding company, particularly when that company is in court supervised creditor protection.

Having said that, the lenders will not want to settle for just pennies on the dollar so determining whether the subsidiaries should continue on a going concern basis will be a consideration. The lenders could petition for them to be sold in an attempt to recover monies owed.

The President of Canadian North seems to be relying on the wishes of the shareholders whom have already surrendered control of the company to the court. That would be misplaced trust.

If the secured creditors have liens in place then they can ask the court to enforce the liens. And if the fate of the holding company is to be determined in a restructuring plan, then it will be the unsecured creditors that will decide whether it will be going concern or liquidation. The Norterra shareholders have no say and I suspect will see their stake wiped out.

You have to wonder how this will go if and when it hits the courts. The only shareholder is the Inuvialuit

 Canadian North is a subsidiary of NorTerra Inc., which is owned by the Inuvialuit Development Corporation, representing the Inuvialuit of the Western Arctic.

Ownership

NorTerra Inc. is a private, investment-focused management and holding company headquartered in Edmonton, Alberta that has been in operation since 1985.  NorTerra is owned by the Inuvialuit Development Corporation (IDC) on behalf of the Inuvialuit of the Western Arctic.

Inuvialuit Development Corporation

IDC is one hundred percent Inuvialuit owned and its sole shareholder is the Inuvialuit Regional Corporation (IRC).  IDC is an investment, venture capital and management holding company, offering a fully integrated package of expertise, skills, and resources to support industry ventures in the Western Arctic.  IDC continues to secure financial and long-term benefits for Inuvialuit.  IDC manages its investments, from its head office in Inuvik, Northwest Territories.

Receiving its mandate from the Inuvialuit Final Agreement, IDC promotes meaningful participation of Inuvialuit in the Western Arctic, circumpolar and national economies by building and protecting a diversified asset base to generate sustainable financial returns.