It appears that Bombardier Corp (TSX: BBD.B) is headed for a share consolidation. The company late on Friday announced that its board of directors has approved a consolidation of both its Class A as well as its Class B shares.
The share consolidation will see shareholders receive one post consolidation share for every 25 pre consolidation shares held, with Class A and Class B to be consolidation at this same ratio. The reverse split will see the firms 308.7 million Class A shares reduced down to 12.3 million shares, while its 2.12 billion Class B shares shares will be cut down to 85.3 million.
Convertible securities, such as options, share units, and rights, are to be proportionately adjusted, with no fraction shares to be issued. Any fractional shares will be rounded down, with shareholders to receive cash compensation for these shares, net of brokerage commissions and expenses.
The company also indicated at the same time that it would be renewing its normal course issuer bid, under which it is to acquire up to 20.0 million pre-consolidation class B shares. The figure equates to just 0.94% of its outstanding shares. On a post-consolidation basis it amounts to just 800,000 shares. A portion of the repurchased shares are to be cancelled, while a portion will also be used to settle obligations of the company related to its share based incentive plans. Just 16.7% of the shares repurchased are planned to be cancelled.
Finally, Bombardier also indicated that under its share buyback program that expires in June 2022, the company has already repurchased 62.0 million Class B shares, the maximum allowed under the facility.
The planned share consolidation is to go into effect in June 2022, after which time the renewed buyback program is also expected to commence.
Bombardier Class B shares last traded at $1.21 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
