Canadian Utilities Plans Share Exchange
Canadian Utilities proposes a share exchange initiative to simplify capital structure and reduce administrative obligations.
Canadian Utilities has announced a proposal to exchange class B common shares for class A nonvoting shares, offering a 10% premium to eligible holders. This move is aimed at simplifying the company's capital structure and reducing administrative obligations.
The energy infrastructure company's board of directors has determined to make this exchange offer to holders of the B shares. Under the proposal, holders of class B shares will receive 1.1 class A nonvoting shares of the company in return.
Since the implementation of the dual class share structure in 1982, there has been a gradual decrease in the number of noncontrolling B shareholders. The conversion of B shares into A shares over time has resulted in the dual class structure decreasing to under 3%.
Canadian Utilities' parent company, Atco, along with its related parties, currently holds 97.4% of the outstanding B shares. These parties are exempt from the share exchange. Therefore, following the exchange, Atco will be the sole holder of the B shares.