Major Air Canada holder endorses bailout and sees 50% upside

Letko Brosseau & Associates, one of Air Canada’s largestshareholders, says the terms of the government’s rescue packageare fair and the airline’s stock could rise about 50% from current levelsonce the pandemic eases. Canada’s largest carrier reached a deal Monday with the federal government for loans and equity worth $5.9b. The company will get access to five new credit facilities; the state will buy an ownership stake of more than 5% and receive 14.6m warrants to buy more shares. “In spite of the dilution that we see, we still see a path for this company to be worth, at least, in excess of $40 when the COVID situation and the airline situation normalizes a bit more,” Paul Younes, an analyst at Montreal-based Letko, said in an interview on BNN Bloomberg Television. Air Canada was trading at $26.90 as of 3:51 p.m. in Toronto. Letko is Air Canada’s third-largest shareholder with about $690 million worth of stock, according to data compiled by Bloomberg. Younes described it as “our firm’s most successful investment.”<br/>