ACE to Sell Minority Stake in Air Canada

ACE Aviation said last week it will sell a minority stake in its main operating unit, Air Canada, for up to $528 million, marking the return of the country’s dominant airline to the public market.

The initial and secondary offerings, with shares priced at $21 each, value Air Canada at $1.83 billion. If an over-allotment option is exercised by underwriters, ACE will retain a 71.25 percent interest in the carrier.

ACE Chief Executive Robert Milton started the spin-off process in August, saying it could eventually lead to an end to the holding company structure, which was set up to allow Air Canada to emerge from bankruptcy protection in 2004.

The company has already sold interests in its Jazz Air regional carrier and Aeroplan frequent flier program, and plans to sell its aircraft maintenance division.

Last week, ACE reported its third-quarter profit fell 62 percent to $89.9 million, with much of the drop blamed on a charge related to the redemption of Aeroplan points.