ECN Capital Announces Approval for Share Repurchase Plans
ECN Capital Corp. Announces TSX Approval for Share Bids
ECN Capital Corp. is thrilled to announce that the Toronto Stock Exchange (TSX) has granted approval for its normal course issuer bids. This initiative includes repurchasing common shares and Series C preferred shares. With this move, ECN Capital aims to further strengthen its commitment to enhancing shareholder value.
Understanding the Bids
Under the approved plans, ECN Capital intends to buy back as many as 15,472,849 common shares and 371,240 Series C preferred shares. This represents about 10% of the public float for both types of shares, showcasing the company’s proactive approach to managing its capital efficiently. The repurchase period is set to start on September 23, 2024, and will run until the earlier of September 22, 2025, or until the bids are fully executed.
Volume and Purchase Limitations
According to the TSX regulations, the average daily trading volumes for common shares and Series C preferred shares over the past six months were 406,877 and 1,642, respectively. Consequently, daily purchases will be capped at 101,719 common shares and 1,000 preferred shares per trading day, unless exempted for block purchases. The flexibility of these purchases is in line with the company's strategy to optimize its capital structure.
Financial Integrity and Funding
The funding for these bids will come from ECN Capital's existing cash resources, ensuring that the company maintains financial stability throughout the repurchase process. All shares bought back will be cancelled, which means that this strategy is not just about returning cash to shareholders but also about reducing overall share count, potentially increasing earnings per share.
The Company’s Perspective
ECN Capital believes that these repurchases are in the best interest of its shareholders. The company evaluates various financial strategies regularly, and the current conditions present an excellent opportunity for share buybacks.
Plans for Future Transactions
Earlier this year, ECN Capital's previous bids, approved by the TSX, allowed the repurchase of 6,329,034 common shares and the same amount of Series C preferred shares. However, during this period, no shares were actually repurchased in the open market, demonstrating a careful and calculated approach to capital management.
Automatic Share Purchase Plans
To streamline the future repurchases, ECN Capital has established automatic share purchase plans with designated brokers. These plans have also received approval from the TSX and will begin implementation on the same date as the stated bids. With these plans, brokers can purchase shares during internal trading black-out periods, thus maintaining continuous liquidity options.
About ECN Capital Corp.
ECN Capital Corp. is a prominent service provider with managed assets totaling USD 5.3 billion. The company specializes in providing innovative financial solutions tailored to meet the unique needs of banks, credit unions, life insurance companies, pension funds, and institutional investors across North America. It focuses on originating and managing credit assets encompassing various types of consumer and commercial loans.
Frequently Asked Questions
What is a normal course issuer bid?
A normal course issuer bid (NCIB) is a legal mechanism allowing companies to repurchase their shares from the market to enhance shareholder value.
How many shares will ECN Capital buy back?
ECN Capital plans to repurchase up to 15,472,849 common shares and 371,240 Series C preferred shares under the approved bids.
What is the purpose of these share repurchases?
The primary purpose of these repurchases is to return value to shareholders and to potentially increase the company's earnings per share by reducing the number of shares outstanding.
When is the timeline for the share repurchases?
The repurchases will be effective from September 23, 2024, until either September 22, 2025, or the completion of share buybacks under the bids.
Who can ECN Capital buy shares from?
ECN Capital can purchase its shares on the open market or through approved trading systems in Canada, depending on market conditions and regulations.
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