HALIFAX, Jan. 4 /CNW/ – Chorus Aviation Inc. ("Chorus") confirmed today that the previously announced plan of arrangement providing for the conversion from the income trust, Jazz Air Income Fund ("the Fund"), to the dividend paying corporate structure, Chorus, has been completed. As a result of the conversion, Fund Unitholders will receive one share of Chorus for each unit held.
The new Chorus shares will be posted for trading on the Toronto Stock Exchange ("TSX") with the trading symbols of CHR.A (for the new Class A Variable Voting Shares) and CHR.B (for the new Class B Voting Shares) on January 4, 2011. As part of the conversion Chorus has assumed all of the obligations of the Fund's convertible debentures which will also be posted for trading on the TSX on or before January 4, 2011 under the trading symbol CHR.DB. The Fund's trust units and convertible debentures (TSX: JAZ.UN, JAZ.DB) will be de-listed by the TSX.
"Completing this corporate conversion is a key step in support of our growth strategy," said Joseph Randell, President and Chief Executive Officer, Chorus. "As a corporation we intend to continue to offer our shareholders one of the industry's highest dividends and long-term value. The new organizational structure to be put into place upon conversion will help facilitate a strategy of growth and diversification."
The board of directors of Chorus has established a dividend policy pursuant to which a fixed dividend is anticipated to be paid to Chorus shareholders on a quarterly basis. The amount of any dividends payable by Chorus will be at the discretion of its board of directors and will be established based on certain terms and conditions. It is anticipated that dividends will initially be set at $0.15 per Chorus share per quarter, with the first Chorus dividend to be declared in respect of the quarter ending March 31, 2011.
It is anticipated that the corporate structure of Chorus will attract new investors, and provide a more active and attractive market for its shareholders.
Chorus, like its predecessor Jazz Air Income Fund, is subject to restrictions on voting by non-residents under the Canada Transportation Act. As previously described in the Fund's proxy circular, Registered Unitholders who have delivered the required Declaration of Canadian Status with their Letter of Transmittal and non-registered Unitholders have provided the required information as to their Canadian status to their nominees will receive one Class B Voting Share per unit held and non-Canadians and person who have not completed such Declarations will receive one Class A Variable Voting Share per unit held. Any former registered Unitholders who have not yet completed such forms are urged to do so and any former non-registered holders who have not provided the required information to their nominees should contact such nominees.
Unitholders are also advised to contact their own tax advisors to obtain tax advice in connection with the conversion. The exchange of units of the Fund for shares in the capital of Chorus will trigger a capital gain or capital loss depending on each Unitholders' circumstances. If the exchange of units for shares results in a capital gain, eligible Unitholders may obtain a partial or full tax deferral by filing a tax election with the Canada Revenue Agency. You may request a tax election form and tax instruction letter from the Fund by writing to Investor Relations at 310 Goudey Drive, Enfield, Nova Scotia, B2T 1E4 or by fax at 902-873-2098.
The final cash distribution of $0.05 per unit for Unitholders of the Jazz Air Income Fund covering the period from December 1, 2010 to December 31, 2010 was segregated for the benefit of Unitholders prior to December 31, 2010 and will be distributed on January 10, 2011 to Unitholders of record at the close of business on December 31, 2010 without any further action on the part of such Unitholders.
CAUTION REGARDING FORWARD-LOOKING INFORMATION ---------------------------------------------
Certain statements in this news release may contain statements which are forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and other uncertain events. Forward-looking statements, by their nature, are based on assumptions, including those described below, and are subject to important risks and uncertainties. Any forecasts or forward-looking predictions or statements cannot be relied upon due to, amongst other things, changing external events and general uncertainties of the business. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements to differ materially from those expressed in the forward-looking statements. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, risks relating to Jazz Air LP's relationship with Air Canada and Thomas Cook Canada Inc., risks relating to the airline industry, energy prices, general industry, market credit and economic conditions, competition, insurance issues and costs, supply issues, war, terrorist attacks, epidemic diseases, acts of God, changes in demand due to the seasonal nature of the business, the ability to reduce operating costs and employee counts, secure financing, employee relations, labour negotiations or disputes, restructuring, pension issues, currency exchange and interest rates, changes in laws, adverse regulatory developments or proceedings, pending and future litigation and actions by third parties, as well as the factors identified in the Risk Factors section of the Fund's MD&A dated November 8, 2010. The forward-looking statements contained in this discussion represent the expectations of the Fund and Jazz Air LP as of November 8, 2010, and are subject to change after such date. However, the Fund and Jazz Air LP disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
Chorus Aviation Inc. --------------------
Chorus Aviation Inc. ("Chorus") was incorporated on September 27, 2010 and is a dividend-paying holding company which owns Jazz Air LP.
Chorus is traded on the Toronto Stock Exchange under the trading symbols of CHR.A, CHR.B and CHR.DB.
About Jazz Air LP -----------------
Jazz Air LP ("Jazz") is wholly owned by Chorus Aviation Inc. and has a strong history in Canadian aviation with its roots going back to the 1930s. Since February 2006, Jazz has generated some of the strongest operational and financial results in the North American aviation industry. Under a capacity purchase agreement with Air Canada, Jazz provides service to and from lower-density markets as well as higher-density markets at off-peak times throughout Canada and to and from certain destinations in the United States. Jazz currently operates scheduled passenger service on behalf of Air Canada with approximately 790 departures per weekday to 85 destinations in Canada and in the United States with a fleet of Canadian-made Bombardier aircraft. Jazz also operates Boeing 757-200 aircraft on behalf of Thomas Cook Canada for the winter seasons to various destinations in the Caribbean, Mexico and Central America from four Canadian gateways – Toronto, Ottawa, Montreal and Halifax.
For more information, visit www.flyjazz.ca.