New, But Familiar Face Takes Over Air Canada

Apr. 1.09 | About: Air Canada (ACDVF)

The replacement of Montie Brewer as CEO of Air Canada (AIDIF.PK) with Calin Rovinescu brings a familiar face to the troubled airline. Mr. Rovinescu comes over from Genuity Capital Markets, where he was a co-founder and an advisor on several M&A, restructuring and financing deals in a variety of industries.

Mr. Rovinescu worked for Air Canada before that from 2000 to 2004, eventually taking on the job of Chief Restructuring Officer. In this role, he was a key figure in the company’s successful emergence from the Companies’ Creditors Arrangement Act (CCAA). Mr. Rovinescu also advised the company as a lawyer in its 1999 defence against the hostile takeover bid from Onex Corp.

Raymond James’ Ben Cherniavsky remembers him as “an impressive figure with a sharp mind and keen understanding of corporate strategy.” But while Mr. Rovinescu is not a traditional airline guy, the analyst thinks this works to Air Canada’s advantage given its current challenges.

Mr. Cherniavsky told clients:

“Still, suddenly and dramatically bringing in someone like Mr. Rovinescu—and (presumably) forcing out Montie Brewer—speaks to the extreme turmoil currently taking place at Air Canada.”

As a senior executive of the old Air Canada and part of the inner circle of former CEO and current chairman and CEO of ACE Aviation Holdings Inc., Robert Milton, the new boss won’t be the fresh face many in the airline’s labour unions are looking for.

The analyst pegged the airline’s chances of survival at 50/50 at best last week and said this move doesn’t do much to change that outlook.

His price target is under review “due to the highly leverage nature of Air Canada’s valuation and the company’s extreme sensitivity to enormous imponderables.”