Chorus Aviation Announces Shareholder and Board Approval for Share Consolidation
Chorus Aviation Inc. (TSX: CHR), referred to as “Chorus” or the “Corporation,” recently revealed an important corporate decision regarding the proposed consolidation of its Class A Variable Voting Shares and Class B Voting Shares (collectively referred to as the “Shares”). The holders of these Shares, known as “Shareholders,” gathered at a special meeting to vote on the matter. The result of the vote has led to the approval of a special resolution authorizing the Corporation to proceed with the consolidation of its Shares. The Board of Directors, referred to as the “Board,” has been granted the discretion to implement the consolidation at any time before February 4, 2026.
The proposed consolidation will see a restructuring of the Shares, with the ratio ranging from one (1) post-consolidation Share for every five (5) to ten (10) pre-consolidation Shares. The resolution was overwhelmingly approved by Shareholders, with 95.5% of the votes cast in favor of the proposal at the special meeting held earlier today. For the resolution to be valid and effective, it required an affirmative vote of at least two-thirds of the votes cast by Shareholders. The results of the voting will be publicly available, as the report will be filed under the Corporation’s profile on SEDAR+.
Chorus further confirmed that the Board, in its judgment, has decided to proceed with the Consolidation based on a specific ratio. The chosen ratio is one (1) post-consolidation Share for every seven (7) pre-consolidation Shares. The decision to implement this consolidation ratio has been conditionally approved by the Toronto Stock Exchange (TSX), and the expected effective date for the Consolidation is on or about February 5, 2025. This decision marks a significant step in the Corporation’s corporate actions and reflects a well-considered strategy designed to better align the company with its broader goals.
Given the current number of issued and outstanding Shares, the expected outcome of this consolidation will be a substantial reduction in the total number of Shares in circulation. Currently, there are approximately 188,575,573 Shares outstanding. After the consolidation is completed, the number of Shares is expected to decrease significantly, with a projected total of approximately 26,939,368 Shares outstanding. This Chorus Aviation reduction will occur following the application of the specified consolidation ratio of one post-consolidation Share for every seven pre-consolidation Shares. It is important to note that the actual number of Shares outstanding after the consolidation may vary due to the elimination of fractional Shares, which will not be issued as part of the consolidation process.
Once the consolidation is finalized, the Shares will continue to be listed on the TSX under the same symbol, “CHR.” However, due to the consolidation, the Shares will be considered a substituted listing. Consequently, the Shares will be assigned a new CUSIP (Committee on Uniform Securities Identification Procedures) and ISIN (International Securities Identification Number). The new CUSIP number will be 17040T888, and the new ISIN number will be CA17040T8885. Investors and stakeholders can expect to see these changes reflected in their trading activities. The post-consolidation Shares are scheduled to begin trading on the TSX in the early hours of February 10, 2025.
In addition to the structural changes resulting from the consolidation, the Corporation has also made provisions for adjustments to Chorus Aviation various financial instruments that are linked to the Shares. Specifically, the exercise or conversion price of any currently outstanding share purchase warrants, stock options, and restricted share units (RSUs) issued pursuant to the Corporation’s long-term incentive plan (LTIP) will be adjusted to reflect the approved consolidation ratio. This adjustment will also apply to the deferred share units issued under the Corporation’s deferred share unit plan for directors. Furthermore, any other convertible or exchangeable securities of the Corporation, including the 6.00% convertible senior unsecured debentures due June 30, 2026, will undergo a proportional adjustment to align with the consolidation ratio.
The changes to the number of Shares, as well as the adjustments to the terms of various securities, are part of the broader efforts by Chorus to streamline its corporate structure and provide clearer alignment between its equity and financial instruments. These steps will help enhance the overall flexibility of the Corporation’s financial position and allow it to better manage its capital structure moving forward.
Another important consideration in the aftermath of the consolidation is the adjustment to the number of Shares reserved for issuance under the Corporation’s LTIP. The number of Shares that the Corporation can issue under this plan will be reduced proportionately in line with the consolidation ratio. This measure ensures that the terms of the LTIP remain in alignment with the new capital structure following the consolidation.
The rationale behind the decision to approve and implement the consolidation has been carefully considered by the Board. Typically, such consolidations are aimed at improving a company’s financial structure by reducing the total Chorus Aviation number Chorus Aviation of shares in circulation. This can help in enhancing the per-share metrics, including earnings per share (EPS) and stock price, as well as increasing the overall attractiveness of the company to potential investors.
Reducing the number of Shares may also help to increase the market price per Share, which could potentially make the company’s stock more appealing to institutional investors who may have certain share price thresholds for investment.
From a broader perspective, a share consolidation is a strategic move that can help optimize a company’s capital structure. By reducing Chorus Aviation the number of outstanding Shares, the company can often present itself as more stable and efficient in terms of the value of each individual Share. It can also signal to the market that the company is actively managing its equity base in a way that aligns with its long-term business objectives.
At this stage, it is important to note that, although the consolidation has been approved by Shareholders, it will only be implemented Chorus Aviation once the final procedural steps are completed. Once effective, the post-consolidation Chorus Aviation Shares will be the primary securities traded on the TSX, and investors will need to be aware of the changes in the number of Shares they hold and the adjustments made to the terms of their holdings.
Chorus Aviation Inc. is a recognized entity in the aviation industry, and this decision reflects its ongoing commitment to enhancing shareholder value while positioning itself for future growth. The company’s actions to consolidate its Shares are an important step in this direction, with a view to creating a more efficient capital structure that can support its long-term strategic goals.
In conclusion, the special resolution for the proposed consolidation of Chorus Aviation’s Shares has been overwhelmingly approved by the Corporation’s Shareholders. The consolidation will result in a reduction of outstanding Shares, with a new ratio of one post-consolidation Share for every seven pre-consolidation Shares.
The Chorus Aviation expected date for the consolidation to take effect is February 5, 2025, with the new consolidated Shares expected to begin trading on February 10, 2025. The Board has also approved adjustments to various securities and financial instruments linked to the Shares, ensuring a smooth transition in the Corporation’s capital structure. Investors and stakeholders should remain informed as these changes are implemented, which reflect Chorus Aviation’s continued efforts to optimize its financial position and create value for its shareholders.