TORONTO (HedgeWorld.com)–A Hong Kong hedge fund manager, Victor Li, appears to have won an auction for control of Air Canada, subject to the possibility of further court action.
Mr. Li, the principal of Trinity Time Investments Ltd., has been bidding against Cerberus Capital Management LP, New York, for the position known under Canada’s bankruptcy law as “equity plan sponsor,” a position that will allow Trinity to exercise effective control of the restructured corporation.
Air Canada filed for and obtained protection from its creditors under the Companies’ Creditors Arrangement Act on April 1. The Ontario Superior Court appointed Ernst & Young Inc. as monitor.
On Dec. 8, the court approved an initial agreement between the board and Trinity, but it also allowed Air Canada to consider an alternative proposal from Cerberus. Cerberus offered its proposal on Dec. 10, and Trinity responded by sweetening its own, Dec. 19.
Ernst & Young, as monitor, prepared a report on the two proposals over the weekend, relying in large part upon an analysis offered it by Seabury Securities LLC, Air Canada’s financial adviser.