Tue Mar 10, 2009 12:19pm EDT
* Expects deal to be immediately accretive
* Enters into C$96 mln credit facility
* To record non-cash impairment charge of C$5.2 mln in 2008
March 10 (Reuters) - Exchange Industrial Income Fund said it agreed to buy Calm Air International Ltd for about C$59 million, adding to its regional airline carrier services.
"The Calm Air acquisition will essentially double the size of EIIF's aviation division," CFO Adam Terwin said in a statement.
Exchange Industrial Income Fund (EIIF), an acquisition-oriented income trust focused on the industrial products and transportation sectors, also owns Perimeter Aviation Ltd and Keewatin Air Ltd.
The deal will be funded partly by the issuance of class A units to Calm Air and the balance will be financed through proceeds from a C$25 million public offering of units and convertible debentures, and from its bank credit facilities.
EIIF will enter into a C$96 million revolving term facility with a syndicate of Canadian banks, out of which it will draw about C$30 million to help finance the deal.
Manitoba-based Calm Air is a regional airline carrier that provides passenger and cargo flights to 16 communities in Manitoba and Nunavut.
EIIF, which also manufactures custom tanks, expects to record a non-cash impairment charge of C$5.2 million in 2008 due to the weak economic environment and the resulting decline in demand for mounted tanks at its Jasper Tank division.
Shares of EIIF were up 12 Canadian cents at C$9.10 in Tuesday afternoon trade on the Toronto Stock Exchange.
($1=1.291 Canadian Dollar)
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*Reporting by Richa Dubey in Bangalore; Editing by Anne Pallivathuckal