February 10, 2012 / 12:37 PM / in 6 years

UPDATE 1-ACE Aviation plans to wind up operations

Feb 10 (Reuters) - ACE Aviation Holdings Inc , created in 2004 to hold business units of Air Canada , said it plans to seek shareholder approval to wind up, distribute assets and ultimately dissolve its operations.

The investment holding company with interests in the aviation industry recorded a 2011 loss and reduction in net assets in liquidation of C$90 million ($90.55 million), which includes unrealized losses of C$76 million on its investment in Air Canada.

On Thursday, Air Canada, Canada’s biggest airline, reported a higher-than-expected quarterly loss as it grappled with higher costs even as rival WestJet Airlines posted strong results on high-yield revenue growth.

Effective January 2011, ACE changed the basis of preparing its financial statements from going concern to liquidation.

ACE, which held 11.11 percent interest in Air Canada, had cash and cash equivalents of $356 million as at Jan. 31.

The shareholders’ meeting will be held on April 25, after which ACE intends to make an initial distribution of C$250 million to C$300 million to its shareholders, the company said in a statement. ($1 = 0.9939 Canadian dollars) (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Supriya Kurane)

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