07:18 AM EDT, 06/05/2025 (MT Newswires) -- Transat A.T. Inc. ( TRZBF ) announced Thursday that it has reached an agreement in principle with Canada Enterprise Emergency Funding Corporation (CEEFC) for the restructuring of the indebtedness incurred by Transat under the Large Enterprise Emergency Funding Facility (LEEFF) program managed by CEEFC in the context of the COVID-19 pandemic.

A statement noted the transaction remains subject to the execution of definitive agreements and documentation giving effect to it.

Among highlights, outstanding debt with CEEFC has been reduced to $334 million from $772 million as at March 31, 2025. It also involves repayment to CEEFC of $41.4 million in cash and issuance of $16.3 million of preferred shares, convertible into Class B Voting Shares representing 19.9% of the issued and outstanding voting shares.

Transat said the transaction will "substantially deleverage the balance sheet and provide flexibility to further implement long term sustainable strategic plan".

"We are pleased to have been able to reach this agreement, which will substantially deleverage our balance sheet and pave the way for Transat to further implement its long term sustainable strategic plan and complete the implementation of its Elevation program" said Mrs. Annick Guerard, Transat's President and Chief Executive Officer.

"CEEFC has worked closely with Transat to ensure it meets its obligations under the LEEFF program while supporting the company's continued commercial viability in a competitive market," said Elizabeth Wademan, President and CEO of Canada Development Investment Corporation (CDEV), the parent company of CEEFC. "LEEFF has been a successful program by making emergency loans available to Canada's large employers to enable them to stay solvent and save jobs both during the pandemic and beyond."

CEEFC is a federal Crown corporation, incorporated in May 2020 under the Canada Business Corporations Act and is wholly owned subsidiary of Canada Development Investment Corporation. CEEFC currently manages the Large Employer Emergency Financing Facility (LEEFF) program and the Large Enterprise Tariff Loan (LETL) facility.