Transat A.T. Inc. issued “a status update regarding its contemplated arrangement with Air Canada (the “Arrangement”)” under the revised arrangement agreement between Transat and Air Canada dated Oct. 9, 2020 (the “Arrangement Agreement”).
The company noted that as announced on Feb. 11, 2021 — although the Canadian government has approved the Arrangement — the Arrangement must still receive the approval of the European Commission (the “Commission”); and the Commission has requested additional information from the parties and its decision is now expected to be rendered only in the first half of 2021.
Previously, it had been indicated that the outside date for the consummation of the Arrangement under the Arrangement Agreement (the “Outside Date”) was set at Feb. 15, 2021 and has now passed.
As a result of the occurrence of the Outside Date without the prior receipt of required approval from the European Commission, each of Air Canada and Transat are currently entitled, at any time, to terminate the Arrangement Agreement upon notice to the other party.
Until terminated or amended by the parties, the Arrangement Agreement remains in effect in accordance with all of its terms.
Transat and Air Canada are continuing their discussions regarding potential amendments to the Arrangement Agreement that may be required.
In the context of such discussions, Transat has been informed by Air Canada that Air Canada will not agree to an extension of the current Outside Date.
In such case, even if the Arrangement Agreement is amended, Air Canada and Transat would retain the ability to terminate the agreement at any time.
There can be no assurance that an agreement on any such amendments will be reached, or that Air Canada or Transat will not terminate the Arrangement Agreement if the relevant circumstances so warrant.