AC大概有点戏了
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Have you seen it ?
Do you got it ? AC is down down down
Air Canada says stock is of slim value
Airline warns that new equity financing plan could render its shares worthless
By KEITH MCARTHUR
00:00 EDT Thursday, June 12, 2003
Air Canada warned late yesterday that its stock has little or no value.
The insolvent airline said in a press release that its board of directors met yesterday and approved a plan to seek $1.35-billion in new debt and equity financing to fund a successful emergence from bankruptcy protection.
"In such circumstances, it is highly likely that a substantial portion of the company's unsecured debt will be converted to new equity and that there will not be any meaningful recovery to existing equity of the company," the airline said.
A company Web site for Air Canada employees has urged staffers for weeks to use caution when investing in Air Canada because "one of the elements of any plan of reorganization may be the cancellation" of existing shares.
The company filed for protection under the Companies' Creditors Arrangement Act (CCAA) on April 1.
Air Canada shares closed down 4 cents at $1.84 yesterday on the Toronto Stock Exchange.
On Tuesday, United Airlines Inc. parent UAL Corp. said in a regulatory filing that it is "highly likely" that its shares will be cancelled under a bankruptcy reorganization plan.
Assets of the world's second-largest carrier "will be insufficient to permit any meaningful distribution to its equity holders" based on a number of factors, including the competing claims of various stakeholders, the company said.
UAL shares were trading at 55 cents (U.S.) yesterday afternoon, down from nearly $2 before the company disclosed that its stock will likely be cancelled.
UAL shares have traded only on over-the-counter bulletin boards since they were delisted from the New York Stock Exchange in late March.
The shares were delisted because they did not consistently close above $1 a share and because UAL filed for Chapter 11 bankruptcy protection.
Before Air Canada's stock announcement, TSX spokesman Steve Kee said the Canadian exchange is unable to delist a company that has filed for protection.
"We can't take any action against a company that is under CCAA. It's a court act. If we were to go in and review a company that is under CCAA, it might be seen as being a hostile act against the company," he said.
Mr. Kee said the only relevant requirement for continued listing on the TSX is that a company have a market capitalization of at least $3-million (Canadian). Air Canada's market cap is about $160-million.
Mr. Kee said the TSX would not consider delisting Air Canada before the company releases a plan of arrangement, which is expected at the end of July.
On its employee Web site, Air Canada points out that shares typically "lose all or most of their value" during a restructuring.
This occurs because there are not enough assets to repay unsecured lenders, who rank ahead of shareholders.
Air Canada has told its unions that it plans to convert up to $9-million in unsecured debt into new shares, which would significantly dilute the value of its equity.
Different companies deal with equity holders in different ways. In some restructurings, such as that of Laidlaw Inc., shareholders lost everything. In others, shareholders receive a token investment in the company. Shareholders in Microcell Telecommunications Inc., for example, received one-10th of 1 per cent of the equity in the recapitalized company.
On Tuesday, Air Canada spokeswoman Laura Cooke said the information on the employee Web site did not need to be broadly disclosed because it was too general to be material.
"The intention of making this information available [was] . . . to provide employees with general information," Ms. Cooke said.
"It does not address specifics, but rather provides information of a general nature concerning customary or typical consequences of a CCAA filing."
Securities laws require companies to quickly and broadly disclose information that could have a material impact on the stock price.
Air Canada has been in hot water in the past for selectively disclosing material information. The company agreed to pay fines totalling more than $1-million in 2001 for privately tipping off 13 analysts about its financial results.
Provincial securities regulators are in charge of overseeing disclosure laws.
Air Canada's warning
The following is an excerpt from a list of questions and answers about Air Canada's restructuring, posted on an Air Canada employee Web site (http://www.achorizons.ca).
Q: What happens to a company's shares following CCAA restructuring?
A: Generally in restructuring plans, at the end of the restructuring process, creditors of the company are issued new shares in exchange for their outstanding debt. There are two ways for this to happen. In one scenario, completely which means that the old shares become completely new shares are issued and the old shares cancelled which means that the old shares become completely worthless. In the second case, there is a massive issue of new shares injected into the market which means that the old shares represent only a tiny portion of total shares and thus are greatly reduced in value. In either case, typically old shares will lose all or most of their value.
Q: What will happen to the Company's stock?
A: The Company's stock is currently trading on the Toronto Stock Exchange...Air Canada presently contemplates that one of the elements of any plan of reorganization may be the cancellation of the company's existing common stock and/or any other equity securities. Accordingly, the Company urges that the appropriate caution be exercised with respect to existing and future investments in any of these securities as the value and prospects are highly speculative.
© The Globe and Mail
最初由 mings 发布
i 'm standing to see what's going on.
Do you got it ? AC is down down down Air Canada says stock is of slim value
Airline warns that new equity financing plan could render its shares worthless
By KEITH MCARTHUR
00:00 EDT Thursday, June 12, 2003
Air Canada warned late yesterday that its stock has little or no value.
The insolvent airline said in a press release that its board of directors met yesterday and approved a plan to seek $1.35-billion in new debt and equity financing to fund a successful emergence from bankruptcy protection.
"In such circumstances, it is highly likely that a substantial portion of the company's unsecured debt will be converted to new equity and that there will not be any meaningful recovery to existing equity of the company," the airline said.
A company Web site for Air Canada employees has urged staffers for weeks to use caution when investing in Air Canada because "one of the elements of any plan of reorganization may be the cancellation" of existing shares.
The company filed for protection under the Companies' Creditors Arrangement Act (CCAA) on April 1.
Air Canada shares closed down 4 cents at $1.84 yesterday on the Toronto Stock Exchange.
On Tuesday, United Airlines Inc. parent UAL Corp. said in a regulatory filing that it is "highly likely" that its shares will be cancelled under a bankruptcy reorganization plan.
Assets of the world's second-largest carrier "will be insufficient to permit any meaningful distribution to its equity holders" based on a number of factors, including the competing claims of various stakeholders, the company said.
UAL shares were trading at 55 cents (U.S.) yesterday afternoon, down from nearly $2 before the company disclosed that its stock will likely be cancelled.
UAL shares have traded only on over-the-counter bulletin boards since they were delisted from the New York Stock Exchange in late March.
The shares were delisted because they did not consistently close above $1 a share and because UAL filed for Chapter 11 bankruptcy protection.
Before Air Canada's stock announcement, TSX spokesman Steve Kee said the Canadian exchange is unable to delist a company that has filed for protection.
"We can't take any action against a company that is under CCAA. It's a court act. If we were to go in and review a company that is under CCAA, it might be seen as being a hostile act against the company," he said.
Mr. Kee said the only relevant requirement for continued listing on the TSX is that a company have a market capitalization of at least $3-million (Canadian). Air Canada's market cap is about $160-million.
Mr. Kee said the TSX would not consider delisting Air Canada before the company releases a plan of arrangement, which is expected at the end of July.
On its employee Web site, Air Canada points out that shares typically "lose all or most of their value" during a restructuring.
This occurs because there are not enough assets to repay unsecured lenders, who rank ahead of shareholders.
Air Canada has told its unions that it plans to convert up to $9-million in unsecured debt into new shares, which would significantly dilute the value of its equity.
Different companies deal with equity holders in different ways. In some restructurings, such as that of Laidlaw Inc., shareholders lost everything. In others, shareholders receive a token investment in the company. Shareholders in Microcell Telecommunications Inc., for example, received one-10th of 1 per cent of the equity in the recapitalized company.
On Tuesday, Air Canada spokeswoman Laura Cooke said the information on the employee Web site did not need to be broadly disclosed because it was too general to be material.
"The intention of making this information available [was] . . . to provide employees with general information," Ms. Cooke said.
"It does not address specifics, but rather provides information of a general nature concerning customary or typical consequences of a CCAA filing."
Securities laws require companies to quickly and broadly disclose information that could have a material impact on the stock price.
Air Canada has been in hot water in the past for selectively disclosing material information. The company agreed to pay fines totalling more than $1-million in 2001 for privately tipping off 13 analysts about its financial results.
Provincial securities regulators are in charge of overseeing disclosure laws.
Air Canada's warning
The following is an excerpt from a list of questions and answers about Air Canada's restructuring, posted on an Air Canada employee Web site (http://www.achorizons.ca).
Q: What happens to a company's shares following CCAA restructuring?
A: Generally in restructuring plans, at the end of the restructuring process, creditors of the company are issued new shares in exchange for their outstanding debt. There are two ways for this to happen. In one scenario, completely which means that the old shares become completely new shares are issued and the old shares cancelled which means that the old shares become completely worthless. In the second case, there is a massive issue of new shares injected into the market which means that the old shares represent only a tiny portion of total shares and thus are greatly reduced in value. In either case, typically old shares will lose all or most of their value.
Q: What will happen to the Company's stock?
A: The Company's stock is currently trading on the Toronto Stock Exchange...Air Canada presently contemplates that one of the elements of any plan of reorganization may be the cancellation of the company's existing common stock and/or any other equity securities. Accordingly, the Company urges that the appropriate caution be exercised with respect to existing and future investments in any of these securities as the value and prospects are highly speculative.
© The Globe and Mail
