MONTREAL -- Air Canada still wants to take Transat A.T. under its wing despite the COVID-19 pandemic, which continues to rock the commercial aviation sector, but the largest airline will pay almost four times less than originally expected.

The two companies announced on Saturday a review of the transaction announcing that Air Canada will pay $5 - a far cry from $18 - for each share of Air Transat's parent company in a now estimated takeover valued at $190 million, from $720 million previously.

"This is the worst crisis that Transat has faced since its founding 33 years ago, and with a second wave (of infections), it is impossible to predict the moment of a possible recovery," said president and chief executive officer, Jean-Marc Eustache in a news release.

He stressed that a merger would allow the company to "withstand the current turbulence in the sector."

Shareholders of Transat A.T. may receive an amount in cash or Air Canada securities. At least two-thirds of the latter will have to vote in favour of the new version of the agreement at the beginning of December.

Air Canada argued that the health crisis had had an unprecedented impact on the sector.

The context is therefore very different compared to August 2019, when the shareholders of the Quebec tour operator voted in favor of the arrangement.

"This consolidation will ensure the stability of the (activities) of Transat and its stakeholders and will strengthen Air Canada and, no doubt, the Canadian aviation industry when we enter a post-COVID-19 world," said Air Canada president and CEO Calin Rovinescu.

The new version of the transaction pushes the sale back to February 15, compared to December 27.

The Competition Bureau and the European Commission, which have expressed concerns about the proposed merger, have yet to say whether or not they will give the green light.

Despite a sharply revised downward price, Transat A.T. argued that the offer of $5 per share represented a premium of 31.6 per cent on the weighted average price based on the 20-day volume of its shares as of October 8. On the Toronto Stock Exchange on Friday, the company's stock closed at $3.83.

The sale will also allow Transat A.T. to obtain a $250 million credit. The original arrangement meant that the tour operator needed Air Canada's approval to obtain financing. 

-- this report by The Canadian Press was first published Oct. 10, 2020.