Transat Restructures Pandemic Debt to “Substantially Deleverage” its Balance Sheet

Transat A.T. Inc. has reached an agreement in principle with a federal government agency to restructure debt accumulated during the pandemic.

The deal was achieved with the Canada Enterprise Emergency Funding Corporation (“CEEFC”) for the restructuring of the indebtedness incurred by Transat under the Large Enterprise Emergency Funding Facility (LEEFF) program managed by CEEFC during the COVID-19 pandemic. 

“We are pleased to have been able to reach this agreement, which will substantially deleverage our balance sheet and pave the way for Transat to further implement its long term sustainable strategic plan and complete the implementation of its Elevation program,” said Annick Guérard, Transat’s President and CEO.

“CEEFC has worked closely with Transat to ensure it meets its obligations under the LEEFF program while supporting the company’s continued commercial viability in a competitive market,” says Elizabeth Wademan, President and CEO of Canada Development Investment Corporation (CDEV), the parent company of CEEFC. 

“LEEFF has been a successful program by making emergency loans available to Canada’s large employers to enable them to stay solvent and save jobs both during the pandemic and beyond.”

The agreement deals with Transat’s entire indebtedness with CEEFC, and results in such indebtedness, currently in a principal amount of approximately $772M in the aggregate as at March 31, 2025, being restructured as follows:

• Repayment of $41.4M in cash to CEEFC
• Credit facilities reduced to a single credit facility of $175M
• Issuance to CEEFC of a $158,735,045 debenture maturing in 10 years
• Issuance to CEEFC of $16,264,955 of preferred shares convertible into Class B Voting Shares representing 19.9% of the issued and outstanding voting shares based on the 5-day VWAP on the date hereof.

Transat’s existing $50M senior revolving credit facility and $74M revolving credit facility for letters of credit are not part of the restructuring and will remain in place and available to Transat.