Discovery Air Announces Loan Refinancing Transaction

TORONTO, March 31, 2014 /CNW/ – Discovery Air Inc. (DA.A) (the “Corporation”) today announced that it has entered into a loan agreement with Element Financial Corporation (“Element”) in the principal amount of $21,500,000 (the “Loan”).

The proceeds of the Loan, which are expected to be advanced in full on April 1, 2014, will be used to refinance approximately $20,500,000 in existing term indebtedness of the Corporation. In connection with the Loan, the Corporation’s obligation to restore the airworthiness of two aircraft (or, in the alternative, repay approximately $4,000,000 of indebtedness secured by those aircraft) has also been eliminated.

The Loan matures on April 1, 2019 and is secured by first lien security interests against certain aircraft owned by the Corporation and its subsidiaries, as well as guarantees and general security agreements from certain subsidiaries of the Corporation. The loan contains customary representations and warranties, covenants and events of default, including an event of default should the Corporation fail to complete, by May 31, 2014, its previously announced rights offering to raise gross proceeds of $15,000,000 or, to the extent necessary, a secured, subordinated loan transaction, both as more fully described in the Corporation’s short form prospectus dated March 21, 2014 (the “Prospectus”). A copy of the Prospectus can be found on SEDAR at www.sedar.com.