So, who owns Aveos Fleet Performance?

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This article was published 24/03/2012 (5122 days ago), so information in it may no longer be current.

QUESTIONS and uncertainties abound in this week’s dissolution of Montreal’s Aveos Fleet Performance Inc.

But the simplest question appears to be the hardest to answer: who, precisely, owns Aveos?

Even court documents shed little light on the subject, except to confirm the company is privately held and “domiciled” in the Cayman Islands and Luxembourg. Both are tax havens and their opaque and secretive banking laws are often used by large hedge funds, banks, multinationals and individuals, making it difficult to determine the real owners of assets.

As reported on Jan. 28, 2010, Aveos’s then-president Chahram Bolouri declined in an interview with the Montreal Gazette to identify the new owners who had just acquired the firm.

Bolouri would only say the new shareholders were largely former creditors, “about four or five” banks and hedge funds, mostly from the U.S.

The company had just completed a secret, year-long negotiation to recapitalize, converting about $800 million of debt into equity.

Before the 2010 deal, Aveos was owned by legendary Manhattan leveraged buyout firm Kohlberg Kravis Roberts & Co. (KKR) and Greenwich, Conn.-based Sageview Capital LP, each with 35 per cent. ACE Aviation Holdings, the parent company of Air Canada, had between 23 and 27 per cent, and Aveos managers and shareholders together owned between three per cent and seven per cent of the firm.

Unusually, KKR walked away after three years of co-ownership having made no money on the deal. Sageview, made up largely of former KKR managers, also reportedly left empty-handed. ACE’s stake in Aveos reportedly fell to about 17 per cent.

Court documents filed Tuesday show Aveos was losing $500,000 a day and all board members resigned on or prior to Tuesday.

By common agreement of the parties, including Air Canada, Aveos, Credit Suisse and a comptroller from FTI Consulting Canada Inc., the monitor in the case, Jonathan Solursh of Toronto firm R.e.l. Group Inc. was appointed chief restructuring officer in the case.

Solursh did not reply to voice mails and emails seeking clarification on the company’s ownership.

It wasn’t immediately clear why brokerage Credit Suisse was a party, other than “the likelihood that it will lose money,” nor whether Solursh is still active in the case given that the issue now is one of liquidation rather than restructuring.

 

Monitors Greg Watson and Toni Vanderlaan of FTI Consulting did not return calls.

Gerry Apostolatos and Tina Hobday of law firm Langlois Kronstrom Desjardins LLP, who represent the International Association of Machinists and Aerospace Workers union, which in turn represents the Aveos workers, also did not return emails and voice mails seeking comments.

Genevieve Sicard, press secretary to Transport Minister Denis Lebel, reiterated “Aveos’s decisions are those of a private company.”

But “the law is the law: the Air Canada Public Participation Act requires Air Canada to maintain operational and overhaul centres in Montreal, Mississauga and Winnipeg.”

She did not provide promised further clarifications.

A former Aveos employee said many of the 2,600 employees will seek leave to launch a class-action suit against the Canada Industrial Relations Board.

Air Canada said late Thursday that “on a transitional basis, the airline has identified qualified and government-approved maintenance facilities in Canada and the U.S. to undertake work that was scheduled to be performed by Aveos… Transition to new service providers is already underway and will have no impact on customers.”

Three planes have already been assigned to go to maintenance, repair and overhaul firm Premier Aviation Overhaul Centre Inc. of Trois Rivières, the carrier said, and it is arranging to finish work on three planes at the now-shuttered Aveos plants.

The airline “encouraged” global MRO companies to buy up the “viable” parts of Aveos.

Alan Butterfield, vice-president for maintenance and engineering said in a statement “Air Canada has a strong preference for working with global MROs… in Canada, with particular emphasis given to Montreal, Winnipeg, Vancouver and Toronto. There exists a pool of well-trained, qualified and talented people available in these cities.”

But the MROs will have to have “globally competitive cost structures,” the airline said.

 

— Postmedia News