Air Transat (TS, Montréal Trudeau) parent Transat AT has announced that it has extended the termination date of its CAD250 million Canadian dollar (USD198 million) short-term loan facility by three months, giving it some financial flexibility while it waits for the European Commission’s regulatory ruling on its planned takeover by Air Canada (AC, Montréal Trudeau).

As previously reported, the tour operator group announced on October 10 last year that it had been able to implement the loan facility with export credit agency Export Development Canada and the National Bank of Canada - the country’s sixth-largest commercial bank - as lead arranger.

The facility will terminate either on June 30 or at the closing of the arrangement with Air Canada, whichever is the earliest date, Transat AT explained in a statement on February 18.

“It may still be drawn in tranches at any time before a date now set at May 31, 2021, subject to meeting the relevant prior conditions and applicable borrowing conditions. Those conditions have not been amended, and include certain requirements regarding freely available cash before and after drawing on the facility,” the statement outlined.

“This extension provides the corporation with additional room to manoeuvre in securing the financing that would be required before the expiry of the credit facility, with the decision from the European Commission regarding the acquisition by Air Canada now expected during the first six months of 2021,” it concluded.

The statement came two days after Transat AT revealed that the European regulator had failed to approve the deal by a deadline of February 15 and had requested additional information from the parties involved in the proposed CAD188.7 million (USD149.6 million) acquisition.