Comment by
luscar99 on Jun 27, 2024 3:00pm
The dividend payment could only be delayed. Eventually they will have to pay the full vested amount. They've done that before. It would also completely destroy their credit rating. They will never get a dime from the credit markets again. And I'm pretty sure the offer to buyback under par (even by 1 cent underpar) would be illegal. As it contradicts the terms of issuance.
Comment by
nkbourbaki on Jun 27, 2024 4:51pm
Buybacks of prefs under par are certainly legal. It happens all the time. (Unless there is specific language in the terms of these particular prefs?) It sure seems like you shouldn't be able to stop dividends and then do a buyback, but I have no idea if it's illegal or companies just don't do it because it would make them a pariah.
Comment by
luscar99 on Jun 27, 2024 5:04pm
No, buybacks "under par" for prefs could only happen bidding on the open stock market under very restrictive conditions (the same conditions as for buybacks of regular stock). https://www.mltaikins.com/corporate-finance-securities/how-to-conduct-a-substantial-issuer-bid/ https://www.mltaikins.com/corporate-finance-securities/conducting-a-normal-course-issuer-bid-on-the-tsx/
Comment by
DaneOddments on Jun 27, 2024 5:36pm
yes, that's true. but it's easily done via SIB. they bought $62 mil. of the preferreds back at a nice discount to par in December 2019. and $62 mil. worth of common stock at $4.25. https://www.aimia.com/aimia-announces-results-of-preferred-share-substantial-issuer-bids/#:~:text=(TSX%3A%20AIM)%20announced%20today,Cumulative%20Floating%20Rate%20Preferred%20Shares%2C
Comment by
TheCount11 on Jun 28, 2024 11:46pm
I'll give you the benefit of the doubt that this scheme is not securities manipulation as I won't go to jail if it is. Imagine the only roadblock to enacting this is scheme is providing a skeptical Board of Directors a few recent examples. Have any recent examples of companies doing this?
Comment by
luscar99 on Jun 29, 2024 12:31pm
I wonder why the hundreds of Canadian companies with preferred shares (most of them with no cash on hand, many of them deeply in debt) haven't figured out this genius maneuver.
Comment by
Hadituptohere on Jun 29, 2024 5:35pm
Severely screw somebody out of money merely because they can? How very Aimia that would be.
Comment by
Hadituptohere on Jul 01, 2024 12:08pm
You'll forgive me if I find taking the pensioners food money away to be a heartless alternative to honoring obligations.
Comment by
DaneOddments on Jul 01, 2024 3:55pm
those honorable obligations are to all stakeholders, not just the preferreds, and common shareholders have gone without their dividends since 2017... https://www.reuters.com/article/markets/us/aimia-suspends-payment-of-all-dividends-on-both-outstanding-shares-idUSASA09TSJ/