ECN Capital Corp. announced that the Toronto Stock Exchange (the “TSX”) has approved the Company’s notice of intention to commence a Normal Course Issuer Bid (the “Common Share Bid”) for common shares of the Company (the “Common Shares”) and a Normal Course Issuer Bid (the “Preferred Share Bid” and, together with the Common Share Bid, the “Bids”) for the Company’s Series A 6.50% Rate Reset Preferred Shares (the “Series A Preferred Shares”) and Series C 6.25% Rate Reset Preferred Shares (the “Series C Preferred Shares” and, together with the Series A Preferred Shares, the “Preferred Shares”).
Pursuant to the Bids, the Company may repurchase on the open market (or as otherwise permitted), up to 22,432,925 Common Shares, 399,900 Series A Preferred Shares and 399,800 Series C Preferred Shares, representing approximately 10% of the “public float” of each of the Common Shares, the Series A Preferred Shares and the Series C Preferred Shares (within the meaning of the rules of the TSX), subject to the normal terms and limitations of such bids. ECN Capital may purchase its Common Shares and Preferred Shares at its discretion during the period commencing on September 17, 2020 and ending on the earlier of September 16, 2021 and the completion of purchases under the applicable Bid.
Under the TSX rules, during the six months ended August 31, 2020, the average daily trading volume on the TSX of the Common Shares, Series A Preferred Shares and Series C Preferred Shares was 600,155, 4,860 and 3,150, respectively and, accordingly, daily purchases on the TSX pursuant to the Bids will be limited to 150,038 Common Shares, 1,215 Series A Preferred Shares and 1,000 Series C Preferred Shares, other than purchases made pursuant to the block purchase exception. The actual number of Common Shares and Preferred Shares which may be purchased pursuant to the Bids and the timing of any such purchases will be determined by ECN Capital, subject to applicable law and the rules of the TSX. As of September 3, 2020, the Company had 242,644,199 Common Shares, 4,000,000 Series A Preferred Shares and 4,000,000 Series C Preferred Shares issued and outstanding and a “public float” of 224,329,259 Common Shares, 3,999,000 Series A Preferred Shares and 3,998,000 Series C Preferred Shares.
Purchases pursuant to the Bids are expected to be made through the facilities of the TSX, or such other permitted means (including through alternative trading systems in Canada), at prevailing market prices or as otherwise permitted. The Bids will be funded using existing cash resources and any Common Shares and Preferred Shares repurchased by the Company under the Bids will be cancelled.
The Company believes that the Bids are in the best interests of the Company and constitute a desirable use of its funds.
Pursuant to a previous notice of intention to conduct a normal course issuer bid, under which the Company sought and received approval of the TSX to purchase 22,228,161 Common Shares, which was approved by the TSX on August 16, 2019 and expired August 19, 2020, the Company purchased 1,920,386 Common Shares on the open market at an average purchase price of $4.47 per share.
The Company has also entered into new automatic share purchase plans (the “Plans”) with designated brokers in order to facilitate repurchases of its outstanding Common Shares and Preferred Shares. The Plans have been approved by the TSX and will be implemented effective as of September 17, 2020.
Under the Plans, the Company’s brokers may purchase Common Shares or Preferred Shares under the Bids at times when the Company would ordinarily not be permitted to, due to its regular self-imposed quarterly blackout periods. Before the commencement of any particular internal trading black-out period, the Company may, but is not required to, instruct its brokers to make purchases of Common Shares or Preferred Shares under the Bids during the ensuing blackout period in accordance with the terms of the Plans. Such purchases will be determined by the applicable broker in its sole discretion based on parameters established by the Company prior to commencement of the applicable blackout period in accordance with the terms of the applicable Plan and applicable TSX rules. Outside of these blackout periods, Common Shares and Preferred Shares will continue to be purchasable by the Company at its discretion under its Bids. Each Plan will terminate on the earliest of the date on which: (a) the purchase limit specified in the Plan has been reached, (b) the purchase limit under the applicable Bid has been reached, (c) the Company terminates the Plan in accordance with its terms, in which case the Company will issue a press release confirming such termination, and (d) the applicable Bid terminates.
About ECN Capital Corp.
With managed and advised assets of US$33 billion, ECN Capital Corp. (TSX: ECN) is a leading provider of business services to United States based banks, credit unions, life insurance companies and investment funds (collectively our “Partners”). ECN Capital originates, manages and advises on credit assets on behalf of its Partners, specifically unsecured loan portfolios, secured loan portfolios and credit card portfolios. Our Partners are seeking high quality assets to match with their deposits or liabilities. These services are offered through three operating businesses: Service Finance, Triad Financial Services and The Kessler Group.