Air Canada Completes IPO

On November 24, 2006, Air Canada completed its initial public offering pursuant to which an aggregate of 9,523,810 Class A Variable Voting Shares and Class B Voting Shares were issued from treasury by Air Canada for gross proceeds of $200 million. In addition, ACE Aviation Holdings Inc., the parent company of Air Canada, completed a secondary offering of an aggregate of 15,476,190 Class A Variable Voting Shares and Class B Voting Shares of Air Canada for gross proceeds of $325 million.

The offerings were made in Canada pursuant to a supplemented PREP prospectus filed in all provinces and territories and in the United States pursuant to Rule 144A under the United States Securities Act of 1933. Further to the offerings, ACE Aviation Holdings Inc. retained a majority interest of 75 per cent in Air Canada.

The initial public offering and the secondary offering were underwritten by a syndicate co-led by RBC Dominion Securities Inc., Citigroup Global Markets Canada Inc. and TD Securities Inc., which also included BMO Nesbitt Burns Inc., CIBC World Markets Inc., Canaccord Capital Corporation, Research Capital Corporation, Salman Partners Inc., Versant Partners Inc. and Westwind Partners Inc.

The offerings were accompanied by the establishment of a senior secured revolving credit facility in the amount of $400 million made available to Air Canada by a syndicate of lenders led by the Bank of Montreal as administrative agent.

In connection with the offerings, ACE was represented by Sydney John Isaacs, senior vice president, corporate development and chief legal officer, and Air Canada was represented by David J. Shapiro, vice president and general counsel, Arielle Meloul-Wechsler, senior counsel and director of legal services, Anna Maria Masciotra, senior counsel, commercial and aircraft finance, David Perez, senior counsel, commercial and information technology and Jeff Wood, counsel, commercial.

ACE and Air Canada were represented by a team from Stikeman Elliott LLP composed of Jean Marc Huot, France Margaret Bélanger, Robert Carelli, David Massé, Jean-Daniel Dufour-Neyron and Lydia Pham (securities), Jean Farley, Gayle Noble, An Nguyen and Tania Djerrahian (corporate), Ron Ferguson (regulatory and financing), Craig Mitchell and Kenton Rein (financing), Robert Hogan, Franco Gadoury and Frank Mathieu (tax) and Valérie Mac-Seing (real estate). ACE and Air Canada were represented with respect to US law matters by a team from Skadden, Arps, Slate, Meagher & Flom LLP that included Christopher W. Morgan, Riccardo A. Leofanti, Sally Whitehead and Michele Discepola (corporate), John Amodeo (environmental), Eric Sensenbrenner and Paul Schockett (tax), and Robert Gal and Paul Kehoe (financing).

The syndicates of underwriters and lenders were represented by a team from Osler, Hoskin & Harcourt LLP composed of Warren Katz, Matthew Starnes, Max Rogan, Eva Gazurek and Hugo-Pierre Gagnon (corporate/securities), Rob Lando (US securities), Michael Matheson and Mark Rasile (financing), André de Maurivez (environmental), François Parent and Julien Ranger-Musiol (pension and benefits), Damian Rigolo (labour) and Elaine Marchand and Didier Fréchette (tax). The underwriters were represented with respect to US law matters by a team from Paul, Weiss, Rifkind, Wharton & Garrison LLP that included Andrew J. Foley, Jane Danek, Thomas Rosenstock and Ricky Y.H. Fong; David Sicular and Mashiho Yuasa (tax); Stephen G. Gorell (employee benefits) and William J. O'Brien (environmental).