Air Canada 2006 Annual Report Download - page 124

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19. JAZZ IPO
On February 2, 2006, Jazz Air Income Fund ("Jazz Fund") completed an initial public offering of its fund units.
The Jazz Fund is an unincorporated, open-ended trust. With the proceeds of the initial public offering, the Jazz
Fund subscribed for 23.5 million units of Jazz at a price of $10.00 per unit for net proceeds of $218, net of
offering costs of $17 that were paid during Quarter 1 2006. Concurrent with the closing of the initial public
offering, Jazz received proceeds of $113, net of fees of $2, representing the drawing under a new term credit
facility (refer to Note 3).
On February 27, 2006, following the exercise of the over-allotment option by the underwriters, the Jazz Fund
issued an additional 1.5 million units at a price of $10.00 per unit for additional net proceeds of approximately
$14. The proceeds of the over allotment were used to acquire 1,500,000 partnership units from ACE.
As of December 31, 2006, the Jazz Fund indirectly holds 20.3% of the outstanding limited partnership units of
Jazz. ACE holds the remaining 79.7% of the outstanding limited partnership units of Jazz.
In connection with the initial public offering, Jazz Air Limited Partnership transferred substantially all of its assets
and liabilities to the new Jazz Air LP that was wholly owned by ACE. In consideration ACE received 99,365,143
units of the Jazz Air LP partnership and an acquisition promissory note of $424. The acquisition promissory note
was repaid by Jazz Air LP to ACE from proceeds it received from the offering, a drawdown under its new term
credit facility (Note 7) and out of the working capital of Jazz Air LP.
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