Discovery Air Announces Completion of Common Share Issuance Pursuant to Standby Purchase Agreement with Clairvest

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TORONTO, May 2, 2014 /CNW/ - Discovery Air Inc. (DA.A) ("Discovery Air" or the "Corporation") announced today the issuance of a total of 15,047,284 Class A common voting shares (the "Class A Shares") and 442,567 Class B common variable voting shares (the "Class B Shares", and together with the Class A Shares, the "Common Shares") to certain funds and co-investors of Clairvest Group Inc. ("Clairvest") at a price of $0.86 per Common Share for gross proceeds of $13,321,271.86.  The Common Shares were issued pursuant to the terms of a Standby Purchase Agreement entered into by the Corporation and Clairvest on February 24, 2014 (the "Standby Purchase Agreement") in connection with the Corporation's rights offering which concluded on April 28, 2014 (the "Offering"). A copy of the Standby Purchase Agreement and the Corporation's short form prospectus for the Offering dated March 21, 2014 can be found on SEDAR at www.sedar.com.

As a result of this transaction, Clairvest and persons acting jointly and in concert with Clairvest now own, or exercise control or direction over, approximately 15,614,426 Common Shares representing 48.8% of the aggregate number of Common Shares issued and outstanding. 

In connection with the closing of this transaction, the holders of the Corporation's 10.00% senior secured convertible debentures (the "Secured Debentures") – consisting of funds or co-investors of Clairvest – have irrevocably agreed to waive their right to direct (in certain circumstances) the manner in which 50% of the Common Shares held by certain current and former management shareholders are voted.  The holders of the Secured Debentures have also provided to the Corporation waivers of the debt leverage and pledged asset ratio covenants in the Secured Debentures for the third and fourth quarters of fiscal year 2015 ending October 31, 2014 and January 31, 2015 (the "Q3/Q4 Waivers"). The terms of the Q3/Q4 Waivers are substantially the same as the terms of the waivers granted by the holders of the Secured Debentures on February 24, 2014 for the first and second quarters of fiscal year 2015 (the "Q1/Q2 Waivers").  Additional information concerning the terms of the Q1/Q2 Waivers may be found in the Corporation's Material Change Report dated February 28, 2014.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor will there be any offer, solicitation or sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification of the securities under the securities laws of such jurisdiction.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This news release includes forward-looking statements (as defined in applicable securities laws) regarding Discovery Air and/or its subsidiaries. Forward-looking statements by definition are based on assumptions and, as a result, are subject to risks and uncertainties. As a result of such risks and uncertainties, actual results may differ materially from those discussed in forward looking statements, and readers should not place undue reliance on such statements.

Forward-looking statements represent expectations as of the date they are made, and Discovery Air disclaims any intention or obligation to update or revise any forward-looking statements it may make, whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

ABOUT DISCOVERY AIR AND ITS SUBSIDIARIES

Discovery Air is a Canadian specialty aviation company operating over 160 aircraft with approximately 850 team members. Its subsidiaries provide airborne training to the Canadian military, helicopter operations, air ambulance services, airborne fire services, fixed-wing air charter services, expediting and logistics support, and a range of maintenance, repair, overhaul, modification, engineering and certification services.

Discovery Air's Class A common voting shares and unsecured convertible debentures trade on the Toronto Stock Exchange (symbols DA.A and DA.DB.A, respectively).

SOURCE: Discovery Air Inc.

Sheila Venman, Investor Relations, [email protected], [phone]