Air Canada slashed the purchase price for tour operator Transat AT Inc. to almost a quarter of its earlier offer, citing the impact of the Covid-19 outbreak on the air transport industry.

The Montreal-based airline said it’s cutting the offer for Transat to C$5 a share from C$18 when the deal was announced in August 2019, valuing the company at about C$190 million ($145 million). Transat’s investors can choose between receiving a cash payment or 0.2862 Air Canada shares for each stock they hold, according to the statement Saturday. The previous offer was an all-cash deal.

“Covid-19 has had a devastating effect on the global airline industry, with a material impact on the value of airlines and aviation assets,” Air Canada Chief Executive Officer Calin Rovinescu said in the statement. “This combination will provide stability for Transat’s operations and its stakeholders and will position Air Canada, and indeed the Canadian aviation industry, to emerge more strongly as we enter the post-Covid-19 world.”

Shares of Transat, which also owns an air carrier, slumped 76% this year, among the 10 worst performers on the S&P/Toronto Stock Exchange Smallcap Index as the pandemic hit travel-related stocks. Air Canada lost 67%.

The steep reduction in the offer price is a turnaround in events where Air Canada previously sweetened its offer to C$18 from C$13.

Still, the revised proposal is 31% higher than Transat’s closing price of C$3.83 on Friday. The transaction is now expected to be completed in late-January or early February next year.

Transat also announced a new C$250 million short-term loan facility.