Trusted News Since 1995
A service for global professionals
·
Friday, December 13, 2024
·
768,696,965
Articles
·
3+ Million Readers
Trusted News Since 1995
A service for global professionals
·
Friday, December 13, 2024
·
768,696,965
Articles
·
3+ Million Readers
The federal government has sold its roughly 6-per-cent stake in Air Canada in the past few days, according to a source.
Ottawa bought $500-million in Air Canada AC-T shares for about $23.18 apiece in April, 2021, becoming the biggest investor as part of a bailout package that aimed to shore up the finances of Canada’s largest airline, which lost billions in the COVID-19 shutdown.
The average selling price was about $25 a share over the past few days, according to the source, whom the Globe is not identifying because they are not authorized to speak publicly on the matter.
A government spokeswoman declined to comment on Thursday.
“The government does not intend to be a long-term shareholder of Air Canada and the shares will be divested in due course,” Ministry of Finance spokeswoman Marie-France Faucher said in September.
Peter Fitzpatrick, an Air Canada spokesperson, declined to comment.
Air Canada shares were trading at about $25.45 on the Toronto Stock Exchange on Thursday and have risen by 60 per cent in the past three months.
As part of the selloff, Ottawa unloaded 14 million shares in the past two days through two large block trades, one for 4.15 million shares on Wednesday and another for 10.13 million shares early Thursday, according to trading data reviewed by The Globe and Mail. The average weighted price for these sales was $25.02 per share.
The federal government announced the Air Canada investment as part of an aid package in April, 2021, almost a year into the pandemic that halted most airline traffic and closed borders. The domestic aviation industry was lobbying intensely for financial help to limit deep losses, pointing to large aid packages given to their international rivals.
Ottawa’s aid to Air Canada came with conditions that the carrier provide customer refunds, protect jobs and limit executive compensation.
During the pandemic, Air Canada laid off more than half of its 38,000 employees and grounded much of its fleet, posting a total loss of $9.9-billion between 2020 and 2022. The airline has since ridden a global recovery in demand for travel to post profits, add routes and expand its fleet.
The Air Canada share sale took place against a background of strong stock market performance, with the benchmark S&P/TSX Composite Index up 22.4 per cent year to date.
In the past month, the rally in stock prices has prompted investment banks to serve up a series of stock sales, including two large equity sales from consumer-focused companies, a sector that also includes Air Canada.
Recent stock sales came from clothing retailer Groupe Dynamite Inc., where the founder raised $300-million from an initial public offering, and a $100-million equity sale from Dentalcorp Holdings Ltd. In Calgary, Tourmaline Oil Corp. raised $345-million by selling a portion of its stake in Topaz Energy Corp.
(Updated at 10:38 a.m. ET/ 1538 GMT)
By Ragini Mathur and Nikhil Sharma
Dec 12 (Reuters) – Canada’s main stock index dropped to a more-than-two-week low on Thursday, dragged by commodity stocks, as investors grew nervous about the domestic economic growth amid looming tariff threats by Donald Trump.
The Toronto Stock Exchange’s S&P/TSX composite index was down 209.55 points, or 0.82%, at 25,448.45, and was trading at its lowest since Oct. 31.
At least nine sectors on the index nursed losses, led by the commodity-focussed sectors, with materials falling 2.1%, tracking gold and copper prices.
The heavyweight energy also declined 2% as oil prices decreased following forecasts of ample supply, which offset the optimism around a potential U.S. interest rate cut.
The Canadian central bank slashed its key policy rate by 50 basis points on Wednesday to help boost the country’s slower growth.
“This is the fifth consecutive rate cut and another super-sized cut as well” and “signals a weaker-than-expected economy in Canada,” said Shiraz Ahmed, senior portfolio manager and founder of Sartorial Wealth at Raymond James.
“Adding to this are the ongoing tariff discussions,” Ahmed continued, which he said are among the factors that are “creating a sense of unease in the markets”.
Trump’s tariff threats have raised fears of a trade war between the U.S. and Canada, with the majority of Canadian oil exports sent across the border.
Among individual stocks, Empire Company jumped 7.6% to scale to an all-time high after the food and retail distribution company surpassed estimates for second-quarter profit.
Imperial Oil fell 4.8% following its forecast of higher crude production in 2025, as the Canadian energy major expects to ramp up output from existing oil sands assets.
Stateside, producer prices rose more than anticipated in November, while weekly jobless claims unexpectedly rose last week. (Reporting by Ragini Mathur; Editing by Vijay Kishore)
Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
MoreLess
Two senior federal government sources have confirmed to CTV News that the federal government has sold its stake in Air Canada.
The news was first reported by the Globe and Mail.
During the COVID-19 pandemic in 2021, the government purchased a six per cent stake in the airline for $500 million as part of a bailout package.
Ottawa’s rescue deal with Air Canada at the time included a $5.9-billion loan from the government to help support the airline after it lost billions of dollars during the pandemic.
As of Thursday afternoon, Air Canada shares closed at $25.28 on the Toronto Stock Exchange, up 23 cents.
CTV News reached out to the federal transport minister’s office and was referred instead to Deputy Prime Minister and Minister of Finance Chrystia Freeland’s office, who has not yet responded.
Last week, Transport Minister Anita Anand told CTV News she was “examining the particular legal relationship” with Air Canada in an effort to figure out how to dissuade the airline from bringing in additional carry-on fees.
Air Canada has yet to respond to CTV News’ request for comment.
Ian Lee, associate professor at Carleton University’s Sprott School of Business, says the government should have never bought shares in Air Canada in the first place.
“Its role is the referee of the hockey game, it should not own the hockey team or tell Sidney Crosby when to shoot the puck,” he told CTV News Channel.
“The government of Canada provided billions of dollars to many thousands of corporations in Canada and did not take ownership positions in all those other companies.”
When asked about whether Ottawa selling its shares in Air Canada is in any way connected to the government’s spending announcement on Monday, Lee says yes.
“There’s an awful lot of buzz that they’re going to crank up spending yet again. And so, the government needs money. They’re rattling the cupboards to see what bits and pieces can be sold off.”
Disclaimer:
We have not received any form of compensation for the generation of this blog
Any type of reproduction, copying or distribution of the material in this email is prohibited without a written consent from the site owner.
Disclaimer- By reading our newsletter you agree to the terms of our disclaimer, which are subject to change at any time. Owners and affiliates are not registered or licensed in any jurisdiction whatsoever to provide financial advice or anything of an advisory nature. Always do your own research and/or consult with an investment professional before investing. Low priced stocks are speculative and carry a high degree of risk, so only invest what you can afford to lose. By using our service you agree not to hold us, our editor’s, owners, or staff liable for any damages, financial or otherwise, that may occur due to any action you may take based on the information contained within our newsletters, website, twitter, Facebook and chat. We do not advise any reader take any specific action. Our website, newsletter, twitter, Facebook and chat are for informational and educational purposes only. Never invest purely based on our alerts. Gains mentioned in our newsletter, twitter, Facebook and on our website may be based on EOD or intraday data. We may be compensated for the production, release and awareness of this newsletter. This publication and their owners and affiliates may hold positions in the securities mentioned in our alerts, which we may sell at any time without notice to our subscribers, which may have a negative impact on share prices. Our emails may contain Forward Looking Statements, which are not guaranteed to materialize due to a variety of factors. We do not guarantee the timeliness, accuracy, or completeness of the information on our site or in our newsletters. The information in our email newsletters, twitter, Facebook our website and chat is believed to be accurate and correct, but has not been independently verified. The information in our disclaimers is subject to change at any time without notice.
We are not held liable or responsible for the information in press releases issued by the companies discussed in these blog. Please do your own due diligence.
Trusted News Since 1995
A service for global professionals
·
Thursday, December 12, 2024
·
768,533,706
Articles
·
3+ Million Readers
