N.W.T. bails out Discovery Air with $34M loan
Discovery Air is receiving a $34-million loan from the Northwest Territories government to help it recover from some of the turmoil in global markets.
Discovery Air, which owns northern aviation firms Great Slave Helicopters, Air Tindi as well as exploration logistics firm Discovery Mining Services, says it was hit by the economic downturn while it was trying to expand in recent years.
In a release issued Monday, interim president David Jennings said the company will use the loan to refinance its $33-million mezzanine debt, which will mature Feb. 1.
The 48-month loan from the N.W.T. government's Opportunities Fund will charge 10 per cent interest each year.
"The loan, which comes during unprecedented turmoil in global capital markets, demonstrates the government of the Northwest Territories' commitment to these northern businesses and to their over 400 employees from all corners of the Northwest Territories," Jennings stated in the release.
Jennings added that the company has already been cutting some of its costs, by, for example, not renewing leases on some aircraft.
Incorporated in 2004, Discovery Air acquired Great Slave Helicopters and Air Tindi in 2006, followed by Discovery Mining Services in January 2008.
It also owns Hicks and Lawrence, a niche aviation company that provides aerial forest fire services in northwestern Ontario, and Top Aces Inc., which provides airborne training services to the federal Defence Department.
Discovery Air's head office is based in Yellowknife, but Jennings said the company will also move its corporate office from London, Ont., to the N.W.T. capital in the next year.
The company's stock closed at 37 cents at the close of trade Monday on the Toronto Stock Exchange, up 13 cents from Friday's closing price.