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Chorus to Acquire Falko to Create a Premier Full-Service Provider in Regional Aviation

Published: février 27, 2022

CA$1.1 billion1 transaction; immediately accretive

  • Expands and broadens Chorus’ business to include an established and growing asset management platform with an excellent track record
  • Enhances and diversifies future cash flows with a shift to an asset light model
  • Differentiated model benefits all stakeholders
  • Creates a leading regional aircraft lessor with best-in-class regional aviation management team
  • Establishes partnership with Brookfield as a strategic cornerstone investor in Chorus

Chorus Aviation Inc. announced today that it has entered into a sale and purchase  agreement (the ‘SPA’) pursuant to which one or more wholly-owned subsidiaries of Chorus will acquire Falko Regional Aircraft Limited (‘Falko’), a leading regional aircraft lessor,  together with (i) affiliates of Falko, and (ii) the equity interests in certain entities and aircraft which are ultimately owned by funds managed  by  Fortress Investment Group LLC (‘Fortress’)  and managed by Falko (or one of its affiliates). The total consideration for the transaction is approximately US$855 million comprised of (a) US$445 million of cash consideration (inclusive of agreed adjustments)2, and (b) approximately US$410 million of existing indebtedness that will remain with the relevant target entities. The transaction includes Falko’s asset management platform and Fortress’ equity interests in 1263 owned and managed regional aircraft and will create new opportunities for growth and a differentiated business model to maximize returns on aircraft assets. The combined company will have a total of 353 owned, operated, and managed regional aircraft. Upon closing, Chorus anticipates having 32 airline customers in 23 countries.

Brookfield, through its Special Investments program (‘BSI’), and together with institutional partners, has agreed to make a strategic equity investment in Chorus in connection with the transaction. Conditional upon closing the acquisition, Brookfield will invest US$374 million in Chorus, including US$300 million of preferred equity4 and US$74 million of common equity. The preferred equity will be non-convertible and will initially pay a dividend of 8.75% annually in cash, or 9.5% in kind, at Chorus’ option, with step-ups after the sixth anniversary5. Chorus will issue 25,400,000 common shares6 at CA$3.70 per share, representing 12.5% of the pro forma issued and outstanding common shares and an approximate 8% premium to the 30-day VWAP of Chorus’ shares as of January 28, 20227, and 18,642,772 common share purchase warrants with an exercise price of CA$4.60per share, representing an approximate 35% premium to the 30-day VWAP of Chorus’ shares as of January 28, 20227.

Upon closing the transaction, Chorus will enter into an investor rights agreement with Brookfield providing for, among other things, registration rights, standstill and transfer restrictions and the right to nominate two directors to Chorus’ Board of Directors.  Upon closing the transaction, Brookfield will nominate David Levenson and Frank Yu to Chorus’ Board of Directors.

The acquisition transaction and the private placement to Brookfield are subject to applicable regulatory approvals and customary completion requirements, and are expected to close in the second quarter of 2022.

«The acquisition of Falko is transformative for Chorus, creating a world premier full-service provider in regional aviation,» stated Joe Randell, President and Chief Executive Officer, Chorus. «We are extremely pleased to have Brookfield, a well-respected company with global reach, as our strategic cornerstone investor, bringing extensive experience in asset management, fundraising and capital markets. The equity investment is an important endorsement of our strategy and simultaneously reduces leverage9Brookfield’s significant financial strength and transaction expertise provides Chorus with increased stability and support to execute on our strategy to the benefit of all stakeholders.  The size and scale of the newly combined entity broadens and enhances market opportunities.  Growth through this established asset management platform meaningfully changes Chorus’ risk profile in terms of debt levels, residual value asset risk, and enhanced earnings stability and diversity. This transaction will be accretive10 to earnings and earnings per share in the first year.»

«We are very excited about this transaction as it combines two highly experienced platforms with complementary aircraft portfolios and diversified, high-quality customers worldwide,» said Jeremy Barnes, Chief Executive Officer, Falko. «Regional aircraft serve a critical role for airlines around the world and the growth trajectory is strong. In an increasingly competitive environment, together we’re better able to effectively address the needs of our customers and provide them with a larger scale of fleet solutions. Chorus’ technical skills and capabilities will help maximize asset returns for the benefit of shareholders and fund investors. This transaction caps over a decade of growth and success under the sponsorship of Fortress. We are grateful for the resources, expertise and partnership that Fortress provided as we built Falko into a truly best-in-class platform in a competitive industry, and we now look forward to an exciting next phase of success as part of Chorus.»

«We are pleased to partner with Chorus on the acquisition of Falko, which enables the combined company to execute on its asset-light strategy and benefit from the recovery in the aviation sector,» commented Angelo Rufino, Managing Partner and Head of Americas for BSI. «This investment is another example of how Brookfield partners with companies to originate flexible capital solutions to help them achieve their strategic goals,» said David Levenson, Managing Partner and Global Head of BSI.

A slide presentation regarding the transaction is available on the Chorus investor relations website at this link.


Deutsche Bank Securities Inc. is the exclusive financial advisor to Chorus. Dentons UK and Middle East LLP is the legal advisor to Chorus in connection with the acquisition transaction, and Osler, Hoskin & Harcourt LLP is the legal advisor to Chorus in connection with the private placement.


1.    Total consideration of US$855,000,000 converted at a USD/CAD exchange rate of 1.27.

2.    The total consideration payable is subject to certain further adjustments at closing contemplated in the SPA.

3.    Consists of 74 wholly or majority owned aircraft and minority interests in 52 aircraft held in managed funds.

4.    Refers to newly issued Series 1 Preferred Shares of Chorus.

5.    Dividend rate escalates annually after the sixth anniversary to a maximum, after the eleventh anniversary, of 14.75% for payment in cash and 15.5% for payment in kind.

6.    Refers to Chorus’ Class A Variable Voting Shares and Class B Voting Shares.

7.    30-day VWAP as of January 28, 2022 (CA$3.42), the date the parties agreed to pricing.

8.    Subject to anti-dilution and dividend adjustments.

9.    Leverage is defined as pro forma net debt to equity.

10. Based on assumptions including currently contracted and planned lease revenue, and asset management revenue, depreciation expense, interest costs on the debt assumed with the acquisition, estimated tax rates and a US/CA exchange rate of 1.27. Preferred share dividends are deducted for the purposes of calculating EPS.

Investor Conference Call / Audio Webcast

In connection with this announcement, Chorus will hold an analyst call at 9:30 a.m. ET on Monday, February 28, 2022. The call may be accessed by dialing 1-888-664-6392. The call will be simultaneously audio webcast via:

This is a listen-in only audio webcast.

The conference call webcast will be archived on Chorus’ website at under Investors > Reports > Executive Management Presentations.  A playback of the call can also be accessed until midnight ETMarch 7, 2022, by dialing toll-free 1-888-390-0541, and using passcode 294815#

About Chorus Aviation Inc.
Chorus is a global provider of integrated regional aviation solutions. Chorus’ vision is to deliver regional aviation to the world. Headquartered in Halifax, Nova Scotia, Chorus is comprised of Chorus Aviation Capital a leading lessor of regional aircraft, and Jazz Aviation and Voyageur Aviation – companies that have long histories of safe operations with excellent customer service. Chorus provides a full suite of regional aviation support services that encompasses every stage of an aircraft’s lifecycle, including aircraft acquisitions and leasing; aircraft refurbishment, engineering, modification, repurposing and preparation; contract flying; aircraft and component maintenance, disassembly, and parts provisioning.

Chorus Class A Variable Voting Shares and Class B Voting Shares trade on the Toronto Stock Exchange under the trading symbol ‘CHR’. Chorus 6.00% Senior Debentures, 5.75% Senior Unsecured Debentures due December 31, 2024, 6.00% Convertible Senior Unsecured Debentures due June 30, 2026, and 5.75% Senior Unsecured Debentures due June 30, 2027 trade on the Toronto Stock Exchange under the trading symbols ‘CHR.DB’, ‘CHR.DB.A’, ‘CHR.DB.B’, and ‘CHR.DB.C’, respectively.

About Falko Regional Aircraft Limited
Falko is an established asset management company actively engaged in all aspects of commercial aircraft leasing, financing, and management with particular focus on the regional aircraft market. The team of specialists is focused on managing a portfolio of modern regional jet and turboprop aircraft on lease to leading airlines worldwide, in combination with a growing engine leasing and trading business. Falko is globally positioned to offer comprehensive asset management solutions to the regional aviation industry, with offices and representation in EuropeAsiaSouth America and Australia, from which extensive experience and expertise can be deployed across all regions of the world.

Since 2011, Falko, through its managed funds and affiliates, has acquired over 320 regional jet and turboprop aircraft worth in excess of US $3

About Brookfield
Brookfield Asset Management (NYSE: BAM,TSX: BAM.A) is a leading global alternative asset manager with approximately $690 billion of assets under management across real estate, infrastructure, renewable power and transition, private equity, and credit. Brookfield owns and operates long-life assets and businesses, many of which form the backbone of the global economy. Utilizing its global reach, access to large-scale capital and operational expertise, Brookfield offers a range of alternative investment products to investors around the world—including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors.

Forward-Looking Information
This news release includes forward-looking information and statements. Forward-looking information and statements are identified by the use of terms and phrases such as «anticipate», «believe», «could», «estimate», «expect», «intend», «may», «plan», «potential», «predict», «project», «will», «would», and similar terms and phrases, including references to assumptions. All information and statements other than statements of historical fact are forward-looking and, by their nature, are based on various underlying assumptions and expectations that are subject to known and unknown risks, uncertainties and other factors that may cause actual future results, performance or achievements to differ materially from those indicated in forward-looking information or statements. As a result, there can be no assurance that the forward-looking information and statements included in this news release will prove to be accurate or correct.

Actual results may differ materially from anticipated results indicated in forward-looking information and statements for a number of reasons, including: Chorus’ ability to obtain the regulatory approvals required to complete the acquisition transaction; the ability of the parties to the acquisition and/or private placement transactions to satisfy all conditions precedent to those transactions and conclude them on the terms currently contemplated or at all; Chorus’ ability to successfully integrate Falko’s operations and employees and realize the anticipated benefits of the acquisition transaction; the potential impact of the announcement or completion of the acquisition transaction on relationships, including with employees, suppliers, customers, investors and other providers of capital; a prolonged duration of the COVID-19 pandemic (including as a result of the emergence of new COVID-19 variants) and/or further restrictive measures to minimize its public health impacts; the impact of the COVID-19 pandemic on the financial strength of Chorus’ and Falko’s contractual counterparties; changes in the  aviation industry and general economic conditions; Chorus’ ability to pay its indebtedness and otherwise remain in compliance with its debt covenants; the risk of cross defaults under debt agreements and other significant contracts; the risk of asset impairments and provisions for expected credit losses; and the risk factors in Chorus’ most recent Annual Information Form and in its public disclosure record available under its profile on Forward-looking information and statements contained in this news release represent Chorus’ expectations as of the date of this news release (or as of the date they are otherwise stated to be made) and are subject to change after such date. Chorus disclaims any intention or obligation to update or revise such information or statements to reflect new information, subsequent events or otherwise, except as required by applicable securities laws. Readers are cautioned that the foregoing factors and risks are not exhaustive.

SOURCE Chorus Aviation Inc.

For further information: Chorus Media Contact:; Chorus Analyst Contact: