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.

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.

With respect to the matters described in this news release, specific risks include the risk that the Loan proceeds are not advanced on April 1, 2014 and/or that the conditions precedent to Clairvest Group Inc.'s standby commitment and/or the advance of a secured, subordinated loan, as described in the Prospectus, are not satisfied.

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, unsecured convertible debentures and rights trade on the Toronto Stock Exchange (symbols DA.A, DA.DB.A and DA.RT, respectively).

SOURCE: Discovery Air Inc.

Sheila Venman
Investor Relations
[email protected]
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