Discovery Air Announces Proposal to Amend the Terms of its 8.375% Convertible Unsecured Subordinated Debentures due June 30, 2016

TORONTO, Sept. 30, 2014 /CNW/ – Discovery Air Inc. (DA.A) (“Discovery Air” or the “Corporation”) today announced it will seek approval from holders of its 8.375% convertible unsecured subordinated debentures due June 30, 2016 (DA.DB.A) (the “Debentures”) to amend the terms of the Debentures at a meeting of Debenture holders to be held on November 27, 2014 (the “Meeting”).

The proposed amendments (the “Amendments”) to the Debentures consist of: (i) extending the maturity date of the Debentures from June 30, 2016 to June 30, 2018, subject to the completion of an equity offering of the Corporation’s Class A common voting shares and / or Class B variable voting shares for minimum aggregate net proceeds of CAD $5,000,000 prior to June 30, 2016; and (ii) modifying the change of control provisions of such Debentures to allow additional equity to be invested in the Corporation by Clairvest Group Inc., without requiring the Corporation to repurchase all of the Debentures then outstanding after any investment.

Jacob (Koby) Shavit, the Corporation’s President and Chief Executive Officer stated: “Discovery Air’s strategy requires additional capital to achieve its previously announced plan. These Amendments will assist us in delivering on our objectives and growth opportunities by providing increased financial flexibility to access the capital needed. The Amendments will also provide Debenture holders with a longer period of time during which to receive, what we believe to be, an attractive yield in the current interest rate environment, based on the continued cash interest rate of 8.375%.”

Discovery Air is also pleased that two Debenture holders are supportive of our strategy and the Amendments. Holding an aggregate of 28% of the Debentures, these Debenture holders have entered into lock-up agreements with the Corporation and intend to vote for/consent to the Amendments. They recognize the advantage in being able to retain a cash interest bearing investment which allows for participation in the Corporation’s strategic growth.

Further information concerning the Amendments will be outlined in the notice of Meeting (and accompanying materials) to be sent to Debenture holders in the coming weeks.

Kingsdale Shareholder Services (“Kingsdale”) has been retained by Discovery Air as the Proxy Solicitation and Information Agent in relation to the Meeting. Debenture holders with questions can contact Kingsdale at 1-888-518-6559 toll free in North America, collect at 416-867-2272 outside of North America, or by email at: contactus@kingsdaleshareholder.com.