Air Canada workers set to gain 15 per cent of airline's shares from moratorium

By The Canadian Press

MONTREAL - Air Canada's (TSX: AC-B.TO) unionized employees are about to become shareholders with a 15 per cent stake in the airline in exchange for agreeing to a pension moratorium.

The Montreal-based airline plans to issue next week more than 17.6 million class B shares to a new trust on behalf of its Canadian-based unions.

The shares are being issued as part of a June agreement by the workers to a 21-month moratorium on past service contributions to their pension plans and $550 million in payments due between 2011 and 2013.

Air Canada said the shares won't "materially affect control" of the airline.

The unions will have the right to designate one member of Air Canada's board of directors as long as the trust holds at least two per cent of the outstanding class A and B shares. The appointee cannot be a member or officer of any of the unions.

Air Canada's class B shares were unchanged at $1.44 in trading Monday on the Toronto Stock Exchange.