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: [email protected].

Forward-Looking Statements

Forward-looking information and statements are included in this earnings release.  Please refer to the statement regarding forward-looking statements contained in the Corporation's MD&A for the quarter ended July 31, 2014, which are incorporated herein by reference.  That statement provides an explanation as to what forward-looking statements are, and the specific factors, uncertainties and potential events that the Corporation has identified for the attention of readers.  When relying on forward-looking information and statements to make decisions, investors and others should carefully consider these factors and other uncertainties and potential events.

The Corporation's unaudited interim condensed consolidated financial statements and MD&A for the quarter ended July 31, 2014 are available on the Corporation's website at www.discoveryair.com and on SEDAR at www.sedar.com.  The reader is encouraged to review the unaudited interim condensed consolidated financial statements and MD&A for the quarter ended July 31, 2014 for more complete disclosure on the Corporation's financial condition and results of operations.

The Corporation's Class A common voting shares and unsecured convertible debentures trade on the Toronto Stock Exchange under the symbols DA.A and DA.DB.A, respectively.

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 Debentures trade on the Toronto Stock Exchange (symbols DA.A and DA.DB.A, respectively).

SOURCE: Discovery Air Inc.

Kingsdale Shareholder Services
Toll Free in North America:  1-888-518-6559
Collect:  416-867-2272
Email:  [email protected]