Canada Jetlines Ltd. (JET: TSX-V) has announced it has closed a private placement with SmartLynx Airlines SIA, the company said.
Pursuant to the financing, Jetlines has sold an aggregate of 22,727,272 subscription receipts at a price of USD 0.33 per Subscription Receipt for gross proceeds of USD 7.5 million.
Jetlines entered into a subscription agreement with SmartLynx for a financing of up to USD 15 million. With the closing of the initial USD 7.5 million, SmartLynx retains the option to acquire an additional USD 7.5 million of the Company´s shares at the maximum discounted market price permitted under TSX.V rules at the time the option is exercised.
In connection with the Offering, Jetlines Operations and SmartLynx also entered into an agreement whereby SmartLynx shall provide ACMI (Aircraft-Crew-Maintenance-Insurance) services to Jetlines Operations during the following eight winter seasons.
The net proceeds of the Offering will be used to further the business objectives of Jetlines in launching an ultra-low cost airline carrier in Canada, including advancing the licensing process, augmenting the leadership team with operations and commercial personnel, branding and marketing activities, as well as advance internet, digital media, and IT systems initiatives.
SmartLynx Airlines SIA is a leading ACMI (Aircraft-Crew-Maintenance-Insurance) provider in the EU on Airbus aircrafts.
Canada Jetlines Ltd. is set to become Canada´s first true Ultra-Low Cost Carrier (ULCC) airline, with plans to operate flights across Canada and provide non-stop service from Canada to the United States, Mexico and the Caribbean.