Canada Jetlines (AU, Toronto Pearson) has announced that it has closed a private placement with SmartLynx Airlines (6Y, Riga) valued at CAD7.5 million Canadian dollars (USD5.5 million).

In a statement, Jetlines said it had sold the Latvian ACMI/charter specialist an aggregate of 22,727,272 subscription receipts valued at CAD0.30.

As per the terms of a November subscription agreement, SmartLynx retains the option to acquire an additional CAD7.5 million of Jetlines’ shares.

In return, SmartLynx will be entitled to nominate one individual to Canada Jetlines Ltd.'s Board of Directors and one to the Board of Directors of Jetlines Operations.

SmartLynx will also wet-lease two A320-200s to Jetlines for the winter season (a period beginning on November 5 and ending March 31 of the next calendar year) starting in 2019/20 for at least eight successive winter seasons.

“Expansion of our operations into new markets is a strategic long-term priority for SmartLynx, and the Canadian market is among those we have been looking at for several years," Zygimantas Surintas, CEO of SmartLynx said in a statement.

"We are excited about the opportunity for partnership with Jetlines – not only through SmartLynx’s investment but also through SmartLynx’s ability to contribute our years of experience in airline operations, aircraft leases, maintenance operations and other matters to help Jetlines succeed. The SmartLynx team believes in the ULCC model in Canada and hopes that it can play a part in bringing cheaper air travel to Canadians.”