The federal government in Ottawa has again bailed out struggling tour operator Transat A.T.
(TRZ).
The Montreal-based company says it has secured an emergency loan from the Government of
Canada worth $100 million.
The latest federal loan comes 15 months after Transat received a $700 million emergency loan
from the federal government. At that time, the company said the federal loan would be used to
provide passenger refunds.
Transat A.T., which specializes in flying passengers to sun destinations, is struggling financially,
having lost $213 million in this year’s first half. The mounting losses are in spite of travellers
packing airports coming out of the COVID-19 pandemic.
The new loan from Ottawa includes a provision for another $50 million in federal funding should
Transat meet certain conditions, such as securing additional funding from a third party.
The air carrier said it has reached agreements with all of its lenders to push back credit
deadlines to April 2024.
Transat's total debt amounted to $1.78 billion as of June 30, with revenues of $561 million in the
first half of this year.
The latest federal loan restricts executive compensation, bars dividend payments and share
buybacks, and requires an annual climate-related disclosure report from Transat A.T.
Transat’s stock is down 26% this year and trading at $3.20 per share.
