Decision day in Air Canada dogfight

A BITTER battle over the future ownership of troubled Air Canada is expected to come to a head today when the airline's board names a winner in a hearing before a bankruptcy court.

The tussle for control of the company has pitted Victor Li, elder son of Asia's richest businessman, Li Ka-shing, against New York private equity fund Cerebus Capital Management.

Air Canada received protection from creditors on 1 April with more than US$12bn (£6.8bn) in debt and lease obligations.

It has over 250 aircraft and carries-more than two-thirds of Canada's domestic traffic. But low-cost competition, a slump in the aviation market and a bloated cost structure combined to force the company into filing for protection.

Li, a Canadian citizen, initially appeared to have an edge, offering C$650m (£275m) for 31% of the equity, while creditors were offered a further 20%. But Cerebus's rival offer has secured the support of several of the company's creditors.

Whichever side wins, existing shareholders' stakes will be reduced to practically zero.