Order No. 2012-A-37

Custom Helicopters Ltd. (Custom) has applied to the Canadian Transportation Agency (Agency) for an exemption to allow for the transfer of its licences to a new amalgamated company, Custom Helicopters Ltd. (new amalgamated company).

Under Licence No. 962347, Custom is authorized to operate a domestic service, small aircraft.

Under Licence No. 967122, Custom is authorized to operate a non-scheduled international service, small aircraft.

Section 58 of the Canada Transportation Act (CTA) provides that a licence issued for the operation of an air service is not transferable.

Pursuant to paragraph 80(1)(c) of the CTA, the Agency may exempt a person from the application of a provision of the CTA where the Agency is of the opinion that compliance with the provision by the person is unnecessary, undesirable or impractical.

On December 9, 2011, Custom advised the Agency of a proposed acquisition of Custom by Exchange Income Corporation (EIC). EIC, the owners of Custom and related companies are in the process of finalizing the terms of a share purchase transaction pursuant to which EIC will acquire ultimate ownership and control of Custom. Following the share purchase transaction and associated corporate restructuring, a wholly-owned subsidiary of EIC will merge with Custom and related companies resulting in the new amalgamated company that will carry on the business of Custom.

On December 14, 2011, Custom confirmed that the target date for the closing of the proposed transaction is February 1, 2012 and that the new amalgamated company will keep the name Custom Helicopters Ltd.

With respect to the requirement to be Canadian, the Agency is satisfied, based on the information and documents filed, that the new amalgamated company would meet the Canadian ownership and control requirements as defined in subsection 55(1) of the CTA upon the execution of the proposed transaction.

The Agency notes that the new amalgamated company has the prescribed liability insurance coverage effective February 1, 2012; however, it does not presently hold a valid Canadian aviation document.

The Agency is therefore satisfied that the new amalgamated company meets the requirements of section 61 and subsection 73(1) of the CTA, with the exception of the requirement to hold a valid Canadian aviation document.

To ensure that the proposed corporate restructuring has not changed in any material or substantial way from that reported to the Agency, the Agency orders that the new amalgamated company file with the Agency final executed copies of all of the documents that are referred to in its December 9, 2011 application following the close of the proposed transaction.

The Agency has considered the matter and finds that the proposed transfer from Custom to the new amalgamated company is in the nature of a corporate restructuring. Therefore, compliance by Custom with section 58 of the CTA is impractical in the present circumstances.

Accordingly, the Agency, pursuant to paragraph 80(1)(c) of the CTA, exempts Custom from the application of section 58 of the CTA.

Licence Nos. 962347 and 967122 will be transferred from Custom to the new amalgamated company, Custom Helicopters Ltd. However, the Agency, pursuant to paragraph 28(1)(b) of the CTA, may in any order direct that the order or a portion or provision of it shall come into force on the happening of any contingency, event or condition specified in the order.

The Agency directs that the transfer of these licences shall come into force upon the occurrence of the following:

1. the execution of the proposed transaction which is expected to be effective on February 1, 2012; and,
2. the confirmation from Transport Canada that the new amalgamated company holds a valid Canadian aviation document in respect of the services provided under Licence Nos. 962347 and 967122, in compliance with the requirement of subparagraphs 61(a)(ii) and 73(1)(a)(ii) of the CTA.

New documents of licences will be issued to the new amalgamated company, Custom Helicopters Ltd.