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'Not a bailout': Morneau says Canadians can benefit from Ottawa's loans to big business – Yahoo Canada Finance

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Finance Minister Bill Morneau provided details about the federal government’s Large Employer Emergency Financing Facility (LEEFF) on Wednesday. The program, announced last week, gives financial support to&nbsp;big businesses that need help get them through the COVID-19 pandemic.” data-reactid=”23″>Finance Minister Bill Morneau provided details about the federal government’s Large Employer Emergency Financing Facility (LEEFF) on Wednesday. The program, announced last week, gives financial support to big businesses that need help get them through the COVID-19 pandemic.

Companies with annual sales of at least $300 million can apply for the program designed to protect businesses and jobs.

“These terms ensure that this financing facility provides financing to bridge through this difficult time, but not bailouts,” Morneau said during a news conference.

Public companies must issue warrants with the option to purchase the borrower’s common shares totalling 15 per cent of the principal amount, or receive cash consideration equivalent to the value of the warrants.

“The idea behind the warrant is to make sure that if a firm does well, that Canadians and Canadian tax payers share in that upside,” Morneau said.

Morneau also said Ottawa won’t sit on company boards, but will have “observers.” Private companies will pay a fee in lieu of the warrants.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Businesses can qualify for loans of $60 million or more, of which 80 per cent is secured and 20 per cent is unsecured.&nbsp;There is no upper limit and businesses can apply for the next 12 months through CDEV. Approval will be on a case-by-case basis.&nbsp;” data-reactid=”29″>Businesses can qualify for loans of $60 million or more, of which 80 per cent is secured and 20 per cent is unsecured. There is no upper limit and businesses can apply for the next 12 months through CDEV. Approval will be on a case-by-case basis. 

The interest rate will be cumulative at 5 per cent per annum, payable quarterly in arrears. It increases to 8 per cent on after a year, and by a further 2 per cent per annum each year thereafter.

As previously announced, the loan comes with strict conditions. Companies will be required to have a large footprint in Canada and show how a plan to maintain employment. They will also be subject to environmental assessments and conditions.

There will be strict limits on dividends, share buy-backs, and executive pay. Companies convicted of tax evasion will be disqualified. Collective bargaining agreements, including pensions, will have to be respected.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter&nbsp;@jessysbains.” data-reactid=”33″>Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Download the Yahoo Finance app, available for&nbsp;Apple&nbsp;and&nbsp;Android.” data-reactid=”34″>Download the Yahoo Finance app, available for Apple and Android.

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Profit falls at TD and CIBC as loan loss provisions soar – CBC.ca

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Canadian Imperial Bank of Commerce (CIBC) and TD Bank Group missed quarterly earnings expectations on Thursday, as they set aside billions to cover future loan losses due to the COVID-19 outbreak.

The massive jump in provisions took the total amount set aside by Royal Bank of Canada, Bank of Montreal , Bank of Nova Scotia, National Bank of Canada , CIBC and TD Bank to $10.93 billion.

The money set aside for credit losses on both performing and impaired loans as a result of the COVID-19 pandemic and continued pressure on oil prices has added to pressure on Canada’s biggest lenders from decade-low interest rates.

Canadian banks have grown their oil and gas loan books faster than total lending in recent quarters, and their business loan books overall expanded during the second quarter as borrowers unable to access debt markets drew down credit lines.

CIBC posted an adjusted profit of 94 Canadian cents per share for the quarter ended April, compared with analysts’ expectations of $1.58 per share.

TD Bank, Canada’s second-biggest lender, reported an adjusted profit of 85 Canadian cents per share, missing estimates of 89 Canadian cents.

Net income was $1.5 billion at TD, down 52 per cent from last year. Net income was $392 million at CIBC, down 70 per cent from last year.

CIBC also reported lower net income across divisions and higher expenses. Controlling costs is particularly vital for CIBC, which has already said it expects expenses to grow this year at about double the rate of its rivals.

It flagged layoffs earlier this year to aid its efforts to cut costs and become more efficient.

CIBC set aside $1.41 billion in the quarter for future loan losses, compared with $255 million a year earlier, while total provisions for TD Bank jumped to $3.22 billion, compared with $633 million a year earlier.

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Irving Oil Purchasing North Atlantic Refining Corp. – VOCM

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A tentative deal has been struck for Irving Oil to take over North Atlantic Refining and the Come by Chance oil refinery.

Irving Oil signed the agreement with Silverpeak to acquire North Atlantic, subject to a regulatory review and the conditions of sale being met.

Silverpeak purchased the facility from the Korea National Oil Company back in 2017 amid widespread speculation that Irving was also eyeing the refinery at the time.

Operations at the refinery were idled in March due to a downturn in the industry and concerns around the COVID-19 pandemic.

The refinery shutdown came ahead of planned upgrades and expansion work that officials had indicated would extend the life of the facility.

New Brunswick-based Irving says North Atlantic Refining provides a “reliable supply of fuel products to businesses and consumers across Newfoundland.”

There’s no immediate word on Irving’s plans regarding a possible restart of operations at Come by Chance.

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Irving signs purchase agreement for dormant Come by Chance oil refinery – CBC.ca

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In another shakeup in the Newfoundland and Labrador oil sector, Irving Oil announced Thursday that it has reached an agreement to purchase the idled refinery at Come by Chance.

In a news release late Thursday morning, New Brunswick-based Irving confirmed it will acquire North Atlantic Refining Corp. from U.S. investment firm Silverpeak, with the deal subject to regulatory review and conditions of sale being met.

The agreement includes the refinery in Placentia Bay, which has the capacity to refine 135,000 barrels per day of oil, and North Atlantic’s network of retail sites and other marketing assets.

“As a family-owned international refining and marketing company based in Atlantic Canada, Irving Oil has proudly served the people of Newfoundland and Labrador since 1950, providing a secure supply of energy to its customers across the province,” states the news release.

The refinery stopped making fuels in March because of the pandemic, and a resulting collapse in the oil market. Hundreds of workers have been laid off.

A source tells CBC News that Irving plans to keep the refinery in “care and maintenance” mode for now.

It’s yet another chapter for a refinery that has had a checkered past since it opened in the 1970s, including five different owners, an extended closure and a political scandal at the outset.

But prior to the pandemic, the refinery was riding a wave of optimism, with performance and environmental upgrades, and plans for more.

“We are coming from what we call a basket-case refinery to become a refinery of the future,” Thomas Jenke, former CEO at North Atlantic, said prior to his departure late last year.

If approved, the deal will represent another large investment by the Irving family in Newfoundland and Labrador.

Irving Oil Limited is already a powerful player in the retail gasoline market, with a chain of gas stations and restaurants, including its iconic Big Stops. J.D. Irving Limited operates a chain of Kent home improvement stores in the province, and owns Atlantic Towing, a company that operates a fleet of supply vessels in Newfoundland and Labrador’s offshore oil sector.

Meanwhile, North Atlantic provides fuel products to businesses and consumers across the province, and is a major contributor to the province’s economy, with some estimates putting its value to the gross domestic product at three per cent.

It has a deepwater terminal that welcomes oil tankers from around the globe, and a network of retail assets.

“Irving Oil would look forward to the opportunity to continue to provide a secure supply of energy to customers across the province,” says the press release.

Most workers at the refinery are represented by Local 9316 of the United Steelworkers. CBC has requested comment from union president Glenn Nolan.

This is not new territory for Irving. The company operates Canada’s largest oil refinery, in Saint John.

Read more from CBC Newfoundland and Labrador

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