{"id":48065,"date":"2017-01-20T20:11:00","date_gmt":"2017-01-21T01:11:00","guid":{"rendered":"https:\/\/prefblog.com\/?p=48065"},"modified":"2025-07-07T20:16:31","modified_gmt":"2025-07-08T00:16:31","slug":"transalta-pref-shareholders-not-happy-with-consolidation-plan","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=48065","title":{"rendered":"TransAlta pref shareholders not happy with consolidation plan"},"content":{"rendered":"

Barry Critchley was kind enough to quote me in his piece TransAlta pref shareholders not happy with consolidation plan<\/a>:<\/p>\n

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Others disagree. For instance, James Hymas, a portfolio manager at Hymas Investment Counsel and the publisher of Prefblog, called it \u201can appalling, abusive offer. TransAlta\u2019s extant preferred shares are trading well below their call price, which gives them a lot of room to make impressive capital gains should market conditions improve.\u201d In Hymas\u2019s view, the plan \u201ceffectively lowers the redemption price of the preferred shares outstanding, which will allow any such gains to be scooped up by the company instead of its preferred shareholders.\u201d<\/p>\n

This week, Hymas weighed in again. In an interview he said the \u201camount of extra income being offered is not just minimal but will disappear completely on reset with only a modest rise in government of Canada five year rates.\u201d Accordingly if five year Canada bonds rise \u201csignificantly, the extant issues will pay more than the (proposed) new issue.\u201d<\/p>\n

Hymas also was critical of the process that will see those members of the soliciting group collect $0.13 per share per favorable vote \u2014 but nothing in the event the vote is unfavorable. The large difference in payments, \u201creally makes me think they understand very well how cruddy their offer is.\u201d<\/p>\n<\/blockquote>\n

This follows previous posts on this topic:<\/p>\n