MONTREAL - Air Canada's corporate parent (TSX:ACE.B) has agreed to sell 1.75 million shares in US Airways Group Inc., about 35 per cent of its stake in the American carrier, and will receive about $67.55 million US from the deal.
The purchaser is PAR Investment Partners LP, a Boston-based private investment fund,
ACE Aviation said it will continue to own 3.25 million shares in US Airways Group, has a total market capitalization of about $3 billion. Its shares (NYSE:LCC) closed Monday at $37.92, down $1.73 or 4.4 per cent, in New York.
The Canadian airline holding company, which wholly owns the country's largest airline Air Canada as well as majority stakes in its Jazz Air regional affiliate and the Aeroplan loyalty program, said it will have recouped most of the $75 million that it invested in US Airways while retaining most of the shares it purchased.
"Our investment in US Airways has proven to be highly successful," said Robert Milton, said Robert Milton, Ace Aviation's chairman, president and chief executive.
ACE said the commercial arrangements between US Airways and Air Canada Technical Services, another wholly owned subsidiary of ACE, will continue.
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The loss is down from a year-earlier profit of $15 million, the major drag on earnings coming from rising fuel costs.
ACE Aviation Holdings Inc. is selling a 70 percent stake in ACTS LP, its aircraft maintenance, repair and overhaul subsidiary.
ACE Aviation Holdings Inc. says it's planning another spinoff, a public stock offering of a minority stake in Air Canada.
ACE Aviation Holdings expects to raise as much as $201 million from an initial public offering of the Jazz regional carrier.