MONTREAL – Air Canada said Tuesday it will sell a 25% non-controlling stake in its Aeroplan loyalty program to an investor group led by Blackstone and La Caisse for C$2.5 billion, valuing the business at C$10 billion.

The investor group also includes PSP Investments and British Columbia Investment Management Corp. Air Canada will retain 75% ownership interest and continue to control Aeroplan’s strategy, operations and day-to-day management.

Air Canada said Aeroplan members, partners and employees will see no changes as a result of the transaction.

The airline plans to use the proceeds primarily to repay an upcoming US$1.2 billion debt maturity, with most of the remaining funds going toward accelerating share repurchases under its long-term strategic plan.

Air Canada also plans to spend up to $800 million to buy back shares, it said.

Settlement of the Aeroplan investment is expected Aug. 17.

Air Canada said it will continue to consolidate Aeroplan in its financial statements, with the investment recorded as a non-controlling interest within shareholders’ equity.

The airline will also have the right to repurchase the investors’ stake between the fifth and eighth anniversaries of the transaction’s settlement, as well as following certain specified events.

Aeroplan has more than 10 million active members worldwide, according to Air Canada.