Air Canada shares close marginally lower after government takes equity stake

Air Canada stock ended marginally lower in volatile trading on Tuesday on concerns that existing shareholdings would be diluted after the federal government took an equity stake in the carrier as part of C$5.9b ($4.7b) in aid. Analysts and investors said Air Canada’s decision to accept the bigger-than-expected aid package was the right decision for Canada’s largest carrier as it tries to cope with the crippling downturn in air travel caused by the coronavirus pandemic. “Definitely a positive development because it’s giving them access to a very attractively priced backstop credit facility at very reasonable terms,” said Catharine Sterritt, portfolio manager at CIBC Asset Management, a top shareholder. The deal announced on Monday gives Ottawa a roughly 6% stake in the airline at a discount of 14%, which prompted several analysts to cut their price targets.<br/>