Business Story
Air Canada deal goes to court
DON MacDONALD
The Gazette
Monday, January 12, 2004
ADVERTISEMENT
This week in business will be highlighted by Air Canada's bid to gain court approval for a $650-million investment from Hong Kong businessman Victor Li.
Air Canada's board has selected a sweetened offer from Li's Trinity Time Investments after considering a competing bid from Cerberus Capital Management to become the airline's partner in its restructuring.
University of Toronto airline specialist Joseph D'Cruz said he expects the judge to ratify Air Canada's selection of Trinity Time at tomorrow's hearing but warned that a group of disgruntled creditors might challenge the decision.
"By most appearances, it's a pretty good offer and they seem to have followed all of the procedures the court laid out," D'Cruz said. "But there's a substantial group of creditors who believe they're not getting as good a deal as they would have with Cerberus."
The group of creditors, which is collectively owed about $1 billion, says Trinity's offer "leaves money on the table" and doesn't go far enough to help creditors recover their investments.
In economic news this week, November trade figures will be issued both in Canada and the United States on Wednesday.
The Bank of Canada will be watching the Canadian data closely as it weighs whether to cut interest rates later this month.
If trade with the United States appears to be stagnating because of a strong Canadian dollar, it will be an important argument in favour of a rate cut, said BMO Nesbitt Burns economist Douglas Porter.
"If we don't see a pickup in exports, that might tip the balance in favour of a rate cut," he said.
Economists expect that a cut in Canadian interest rates would put a brake on the dollar's rise by bringing rates closer to those south of the border and favouring U.S.-dollar investments.
A widening of the U.S.'s already huge trade deficit with the rest of the world might put more downward pressure on the greenback.
Investors may get some idea of U.S. Federal Reserve chairman Alan Greenspan's thinking on the economy when he makes a speech tomorrow.
Another important number this week will be the reporting of U.S. retail statistics for the crucial December shopping period.
In financial results: Cable TV company Cogeco Inc. is scheduled to issue its quarterly numbers today; Jean Coutu Group Inc. is expected to report tomorrow; CI Fund Management reports on Wednesday; Maax Inc. and Transat A.T. Inc. post results on Thursday.
dmacdonald@thegazette.canwest.com
© Copyright 2004 Montreal Gazette
attn..310367a ----- so wie ich verstanden habe geht alles über gericht...
gruss falke65