Transat A.T. Inc.'s Board of Directors is once again seeking to postpone its obligations to give shareholders a voice in making important decisions that would ensure the Company's long-term viability

MONTREAL, Dec. 15, 2025 /CNW/ - Pierre Karl Péladeau, on behalf of Financière Outremont Inc. ("Financière Outremont"), holding nearly 10% of the shares of Transat A.T. Inc. ("Transat" or the "Company"), acknowledges the response published by the Company, following its request to hold a special meeting of shareholders, in order to make changes to the Board of Directors aimed at ensuring the future of the Company and building a stronger and more prosperous Transat.

"We are obviously disappointed but not necessarily surprised to see the lack of sense of urgency among the members of the Board of Directors. We are convinced that it is essential to revitalize the Board of Directors and recapitalize Transat's broken balance sheet to enable it to be a leading carrier, for the benefit of all shareholders and stakeholders. We look forward to working towards this goal," stated Pierre Karl Péladeau, on behalf of Financière Outremont Inc.

"The takeover accusations perpetrated by the Company are categorically false. In fact, it is yet another attempt to dodge the company's real problems and distract stakeholders from guiding it to a successful outcome. This is just another predictable and uninspired rhetoric from the Company, which simply ignores the fact that the improvements we are proposing to the Board of Directors--with three (3) new members out of a total of six (6)--are necessary to ensure the addition of expertise in corporate restructuring and value creation. There is no reason why we cannot achieve with Transat what we were able to achieve with Videotron, making it a financial success for shareholders and a success for customers in terms of customer service, while introducing innovative elements, all with the help of Transat employees," adds Pierre Karl Péladeau.

It is urgent that this Board be renewed and that directors with a genuine vested interest in the Company's financial and economic success take their place, as the current members have unfortunately proven incapable, for several years, of turning the Company around or injecting the new capital needed to invest in growth projects. The unfortunate and chaotic situation in which passengers found themselves during the recent conflict with the pilots is just another demonstration of their lack of leadership.

Today: An Underperforming and Broken Transat

Under the current Board of Directors' leadership, Transat has consistently delivered below-expected operational and financial performance, resulting in shareholder value destruction and a financially unbalanced balance sheet. More than five months have passed since Transat and the federal government, through the Canada Enterprise Emergency Funding Corp. (CEEFC) signed a financing agreement, without shareholder approval, to restructure the debt incurred by the Company during the COVID-19 pandemic. At that time, Transat itself acknowledged that it was facing significant financial difficulties.

• Operational and financial underperformance: Transat has recorded five consecutive years of negative earnings per share, reflecting persistent operational underperformance and financial challenges. Transat has consistently posted the worst margins among its peers, with a five-year average EBITDAR margin of 15.9%, representing a gap of 2,290 basis points compared to its benchmark group of North American airlines.
• Underperformance of returns: Over the past five years, Transat's shares have plummeted by 57%, making it the biggest loser among its peers. In contrast, shares of competing airlines have risen by 31%, and the S&P/TSX Composite Index has climbed by 82%. Clearly, shareholders have lost confidence and are disengaged. The only remaining institutional shareholders are Financière Outremont, La Caisse, and the Fonds de solidarité FTQ. Such is the extent of shareholder disengagement that at the last Annual General Meeting of Shareholders on April 29, 2025, the minimum quorum of 25% of shareholders could not be reached, forcing the Company to cancel the meeting and postpone it to May 1 to avoid the 25% quorum requirement.
• Weak balance sheet: Transat remains heavily over-indebted (despite the LEEFF debt restructuring) at 5.5x Total Debt/ EBITDAR^[1], compared to the average of its benchmark group at 4.0x. Furthermore, Air Canada trades at 3.7x Total Debt/EBITDAR, implying limited, or even zero, equity value for Transat post-restructuring. (^[1]Adjusted for subsequent events)
• Limited access to new capital: Shareholders are disengaged, and the Company is unfinanceable, which puts further downward pressure on the stock, exacerbating already weak investor sentiment. Moreover, under the restrictive covenants in the Company's current federal credit agreement, negotiated by the Board of Directors, the Company is burdened with cash flow sweeps under the mandatory repayment event provisions requiring to remit 50% of any financing proceeds to the CEEFC, leaving it little flexibility to generate additional cash. The restrictive debt covenants favor federal debt repayment and restrict Transat's ability to generate additional cash and liquidities for investments in growth projects.
• Questionable Governance: Transat has an excessively large Board of Directors with 11 members, resulting in inefficient bureaucracy and unjustifiable costs. Furthermore, the recent restructuring of the LEEFF debt was carried out without shareholder approval, despite legitimate questions and concerns raised by the Company's second-largest shareholder and reputable media outlets; such actions raise serious concerns about governance standards and the protection of shareholder rights. Meanwhile, executive compensation has skyrocketed and remains high, despite the Company's sustained underperformance. Finally, the Board and management together hold barely 1.1% of the Company's shares, demonstrating a lack of economic alignment with its shareholders.

Our Proposal: A Superior, Recapitalized, and Prosperous Transat

To achieve better results and restore lost confidence, Financière Outremont believes that Transat must take the following essential steps:

• Improvements to the Board of Directors: The number of Board members will be reduced from eleven to six. Three new directors, recognized experts in management and operational excellence, will be appointed, and three others will be current Board members. The new directors subject to shareholder vote will be Pierre Karl Péladeau, André Brosseau, and Jean-Marc Léger.
• Balance sheet restructuring: Restructure Transat's broken balance sheet to ensure its sustainability and provide the Company with the new capital it so desperately needs to invest in growth initiatives.
• Strategic Review: Launch a comprehensive strategic review process that includes an assessment of the Company's strategic direction, capital allocation, senior management, cost structure, investments and financing, partnerships, and strategic alternatives.

"These actions are necessary steps to demonstrate the Board of Directors' commitment to creating value for shareholders and other stakeholders, and to reassure key stakeholders that the Company's strategy is realigned under enhanced and robust oversight," stated Pierre Karl Péladeau, on behalf of Financière Outremont Inc.

Mr. Péladeau concluded: "I continue to believe in Transat A.T.'s compelling value potential for the Canadian airline industry and I am committed to helping advance the company's operations, innovation, and growth, for the benefit of travellers, communities, and the Canadian transportation sector as a whole. With our teams, we want to make Transat A.T. Inc. a great success, as we achieved with Videotron, notably by creating thousands of jobs for the benefit of Quebecers and Canadians."

"As a major shareholder, we are fully committed to our vision of a more successful, recapitalized, and prosperous Transat. Our experience and recognized leadership in growth and value creation demonstrate the credibility of our approach and enable us to effectively support this effort. We are ready to collaborate constructively with the Board of Directors and the company to quickly implement the long-term plan and look forward to engaging with our fellow shareholders and other key Transat stakeholders on the best path forward for the company."

Advisors

Canaccord Genuity is acting as financial advisor and Osler, Hoskin & Harcourt LLP is acting as legal advisor to Financière Outremont Inc.

A full presentation is available at https://transataction.ca/en/

Forward-looking Statements & Disclaimers

This news release may contain "forward‑looking information" and/or "forward‑looking statements" within the meaning of applicable securities laws.  These statements are often identified by words such as "will", "expect", believe" and other similar words, and may include statements regarding potential Board changes at the Company, the potential for capital injections, strategic reviews and/or operational improvements and the expected outcomes of such actions. Forward‑looking information is based on assumptions believed to be reasonable as of the date hereof, but is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Readers should not place undue reliance on forward‑looking information. Except as required by applicable securities laws, Financière Outremont Inc. undertakes no obligation to update or revise any forward‑looking information.

Unless otherwise stated, the views expressed are those of Financière Outremont Inc., in its capacity as a shareholder of Transat A.T. Inc., based on publicly available information and its analysis and opinions. Financière Outremont Inc. is not affiliated with Transat A.T. Inc. or its Board or management. No representation or warranty, express or implied, is made as to the accuracy or completeness of the information herein, and liability is disclaimed to the fullest extent permitted by law.

This news release is not, and does not purport to be, a solicitation of proxies within the meaning of applicable laws. Company shareholders are expressly not being asked to give, withhold or revoke any proxy. Any solicitation of proxies by Financière Outremont Inc. will be conducted in accordance with applicable corporate and securities laws, which may include a proxy circular. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction.

For information: https://transataction.ca/en/

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SOURCE Financière Outremont inc.

Marc Duchesne, [email protected], 514-277-3508