Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
Cineplex Inc. (CGX-T) announced that “in an abundance of caution” it will be temporarily closing its theatres and other entertainment venues across Canada until April 2 “in response to growing global concerns around the spread of COVID-19 and various Canadian government directives.”
Cineplex also said its previously announced agreement to be acquired by Cineworld Group plc remains subject to certain conditions, including that Cineplex has no more than $725-million outstanding under its credit agreement, subject to certain exclusions.
"The impact of the COVID-19 outbreak in Canada and the rapidly evolving reaction of governments and the public to the outbreak have made business planning uncertain for the exhibition and location-based entertainment industries," the company stated.
Cineplex said it's managing its business to reduce expenses to offset declining revenues to support the business and to be in a position to satisfy the debt condition. "The possibility of prolonged closures could impact the ability of Cineplex to mitigate the related revenue decline and satisfy the debt condition or other of the remaining conditions by the outside date," the company stated.
TransAlta Corp. (TA-T; TAC-N) announced the acquisition of a contracted cogeneration asset from two private companies for about US$27 million, subject to working capital adjustments. The asset is a 29 MW cogeneration facility in Michigan which is contracted under a long-term power purchase agreement and steam sale agreement for approximately six years with high-quality counterparties.
“The acquisition marks our first U.S. cogeneration project and aligns with our strategy of growing our on-site generation business, diversifying our cogeneration portfolio, and increasing the pipeline of assets for potential future drop-downs into TransAlta Renewables,” said Dawn Farrell, CEO. “The expansion into new geographic markets further enhances our position as a leader in behind the fence generation and provides potential for future opportunities in the U.S. cogeneration space.”
Sierra Metals Inc. (SMT-T) announced that the Peruvian government has declared a state of emergency to contain the advancement of COVID-19, which restricts travel within the country and requires citizens to remain at home with the exception of grocery, banks and medical. As a result of this declaration, the company said it has temporarily ceased mining operations at the Yauricocha Mine in the country. The state of emergency took effect today and will last for the next 15 days.
The company said its 2020 production guidance remains unchanged “at this time, given that Yauricocha has been running ahead of budget since the beginning of the year, and the company is ahead on 2020 production tonnage to date.”
Recipe Unlimited Corp. (RECP-T), behind various restaurant brands such as Swiss Chalet, The Keg, Milestones and Montana’s, announced the voluntary closure of all its dining rooms “as an additional measure to the municipalities that have already ordered these closures” effective March 18. The company said certain brands will continue to offer take-out, drive-thru and delivery options.
"The health and safety of our guests and team members is our primary concern during this COVID-19 situation. As we closely monitor the actions of other countries and listening to recommendations from government and health authorities, we believe the temporary closure of dining rooms is the right thing to do," says Frank Hennessey, CEO. "This is a critical step in 'flattening the curve' and reducing further spread of the virus."
Chartwell Retirement Residences (CSH.UN-T) announced it has temporarily suspended its distribution reinvestment plan until further notice. “Commencing after the distribution payable to unitholders of record at March 31, 2020, unitholders enrolled in the DRIP will receive distribution payments in cash,” the company stated. “When Chartwell elects to reinstate the DRIP in the future, unitholders that were enrolled in the DRIP at the time of its suspension and remain enrolled at the time of its reinstatement will automatically resume participation in the DRIP. Chartwell’s DRIP, including the 3 per cent bonus distribution, may be reinstated at the discretion of the board,” it added.
Vlad Volodarski, Chartwell’s CEO, said the board approved a temporary suspension of the DRIP program “so that we do not issue our trust units at the current depressed prices.”
GMP Capital Inc. (GMP-T) announced, “in light of the ongoing COVID-19 outbreak and recent market volatility,” that its previously announced transaction to consolidate the ownership of Richardson GMP Ltd will not happen in the timeframe expected. The shareholders meeting set for April 21 has been postponed. “The parties are continuing to work toward entering into a definitive agreement and remain hopeful that they will do so in the future,” the company stated, adding that it “cautions its shareholders and other stakeholders that there is no assurance that any transaction involving Richardson GMP will result from these discussions or on what terms or structure any transaction may occur.”
The company also announced other responses to the COVID-19 outbreak, including cancelling all non-essential travel and mandating that all face-to-face meetings be conducted online. “The company takes its responsibility seriously to do all that it can to play its part in the community to keep everyone safe and healthy,” it stated.
Western Forest Products Inc. (WEF-T) announced the sale of its ownership interested in TFL 44 LP and Alberni Pacific Division Sawmill to Huumiis Ventures Limited Partnership, owned by the Huu-ay-aht First Nation, for $36.2-million.
TFL 44 LP holds assets in Port Alberni, B.C. Huumiis will acquire a 44-per-cent ownership interest in TFL 44 LP from Western for $35.2-million. When the transaction is done, Huumiis will own 51 per cent of TFL 44 LP and Western will own 49 per cent.
Western said it may sell other area First Nations, including Huumiis, a further incremental ownership interest of up to 26 per cent in TFL 44 LP "under certain conditions."
Western will also transfer its APD Sawmill into a newly formed limited partnership "along with certain other assets and liabilities" and said Huumiis will acquire a 7-per=cent ownership interest in APD LP from Western for $1-million. It also said that, subject to further negotiations, Huumiis will have an option to purchase an incremental ownership interest in APD LP, which may include a majority interest.
Hudbay Minerals Inc. (HBM-T; HBM-N) announced that it and Waterton Global Resource Management Inc. have agreed to amend some of the standstill provisions of the settlement agreement dated May 3, 2019 that led to the nomination of independent directors. The parties have agreed to increase the number of company shares that may be acquired by Waterton to 19.99 per cent from 15 per cent during the standstill period.
"The parties also have agreed to amend certain provisions of the standstill and to extend the standstill period for six months if Waterton acquires beneficial ownership in excess of 16 per cent of the company’s shares prior to the original termination date, with an automatic extension of a further six months if Waterton’s beneficial ownership interest exceeds 17.5 per cent of the company’s shares prior to the expiry of such initial six-month extension period," it stated.
PrairieSky Royalty Ltd. (PSK-T) announced that its board has adjusted the company’s allocation of free cash flow for 2020 and is moving to a quarterly dividend starting in the second quarter. The dividend will be adjusted to 24 cents per common share annually or 6 cents quarterly for the balance of 2020.
“Given PrairieSky’s long duration, low decline cash flow stream, we believe this decision is prudent and provides PrairieSky with enhanced flexibility during a challenging macro backdrop,” stated CEO Andrew Phillips. “The excess free cash flow on top of the dividend will allow the company to make decisions which improve the business on a per share basis. This may include internally funding acquisition opportunities and making incremental share purchases and cancellations under the normal course issuer bid, both of which are consistent with our long-term plan for dividend increases over time.”