A survey of North American equities heading in both directions
On the rise
Shares of Corus Entertainment Inc. (CJR.B-T) jumped on Tuesday on news it has negotiated an amendment to a credit agreement with its lenders to give it some increased breathing room as it works to deal with its debt.
The television and radio broadcaster says the maximum total debt to cash flow ratio required under its financial covenants has been increased to 4.75 through to and including Oct.15, with an ability to request advances under the revolving facility to a certain limit.
Under an earlier agreement, the company’s leverage covenant was to decrease to 4.25 times from 4.5 times on Sept. 1.
The amended deal includes requirements to use any excess cash to repay outstanding balances on the revolving facility and certain terms related to the use of proceeds on asset disposals as well as other conditions.
Corus co-chief executive and chief financial officer John Gossling called the amendment a prudent step that is part of a more comprehensive plan the company is working through to strengthen its balance sheet and manage liabilities.
Corus has more than $1-billion in outstanding debt, for which material amounts are due in 2027 and 2028.
Brookfield Asset Management (BAM-T) closed up 0.4 per cent after the Financial Times reported it has put London’s Citypoint tower up for sale, in the biggest test yet of the U.K. capital’s office market after a brutal two-year downturn.
According to the report, the Toronto-based asset manager is seeking at least £500-million for the 36-storey building ahead of a January deadline on about £460-million of debt secured on it.
Southwest Airlines (LUV-N) rose 2.3 per cent after a report showed Elliott Investment now holds 10 per cent of the company’s shares, allowing the hedge fund to call a special meeting at the carrier.
The news comes days before the two sides are scheduled to meet on Sept. 9 to discuss ways to solve problems that have contributed to Southwest’s stock losing roughly half its value over the last three years.
The hedge fund, one of the world’s most powerful activist investors with US$70-billion in assets under management, has demanded that CEO Robert Jordan and Executive Chairman Gary Kelly be ousted. It also laid out plans to nominate 10 directors to the airline’s 15-person board.
The hedge fund, which had taken an 11-per-cent economic stake through derivatives, converted enough of those holdings into common shares to cross the 10-per-cent threshold. Its overall economic stake remains unchanged.
Mr. Jordan, Southwest’s chief executive since 2022, has said he will not resign and has signaled to staff that he and other executives are ready to fight Elliott.
Elliott has signaled to other shareholders that it is ready to take next steps, including calling a special meeting, unless the company is willing to discuss changes to its leadership.
On the decline
Parkland Corp. (PKI-T) was lower by 2.8 per cent after announcing it is looking to sell its Florida-based retail and commercial businesses.
The Calgary-based company’s operations in the state include about 100 retail locations, nine cardlock facilities and four bulk storage plants and warehouses.
Andrew Willis: At Parkland, an activist investor says ‘benefits for me, but not for thee’
It says that early indications show substantial interest in the assets.
Parkland expects to complete the sale within the next 12 to 18 months.
The company says the plan to sell the operations in Florida is part of its non-core asset divestment program which it now expects will top $500 million by the end of 2025.
Parkland operates an oil refinery in Burnaby, B.C., as well as approximately 4,000 fuel and convenience retail stores and commercial locations across Canada, the United States and the Caribbean.
Tesla Inc. (TSLA-Q) gave back early gains and lost 1.6 per cent after a report said it plans to produce a six-seat variant of its Model Y car in China from late 2025.
Tesla has asked suppliers to prepare accordingly for a double-digit increase of Model Y output at its Shanghai factory, according to a Reuters report.
It was not clear how Tesla would raise production at the plant, which is awaiting approval to expand on 70 hectares (172 acres) of former farmland. It has already seen a 6-per-cent on-year increase in domestic and overseas Model 3 deliveries during January-June boosted by last year’s launch of a renewed version.
Separately, the automaker’s sales in China logged their best month for the year so far in August.
Deliveries of China-made Model 3 and Model Y vehicles rose 17 per cent from the previous month. Chinese rival BYD, with its Dynasty and Ocean series of EVs and plug-in hybrids, was again on a roll in August, with passenger vehicle sales up 35.3 per cent year-on-year in August to a fresh monthly high of 370,854 units.
U.S. Steel (X-N) dropped 6 per cent after Democratic presidential candidate Kamala Harris expressed her concern about the steel firm being acquired by Japan’s Nippon Steel.
“U.S. Steel is a historic American company, and it is vital for our nation to maintain strong American steel companies,” Ms. Harris said at the rally. “U.S. Steel should remain American-owned and American-operated.”
President Joe Biden said Ms. Harris would build on the progress they had made during his administration to improve the lives of union workers and that he would do everything he could to help.
“I’ll be on the sidelines,” he said.
The Harris campaign has sought to appeal to union workers in much the same way as Mr. Biden has throughout his presidency. The Democrats aim to keep union workers from being tempted to vote for former Republican President Donald Trump, who also has blue-collar appeal.
Boeing (BA-N) shares slid 7.3 per cent after its stock was downgraded by Wells Fargo analyst Matthew Akers, citing peaking cash flow.
He said the aviation giant has a “generational free cash flow opportunity this decade, driven by ramping production on mature aircraft and low investment need.”
“However, after extensive delays and added cost, we now see growing production cash flow running into a new aircraft investment cycle, capping free cash flow a few years out.”
Boeing’s contract with the International Association of Machinists is set to expire just before midnight on Sept. 12.
U.S. oilfield services firm Halliburton (HAL-N) was lower by 4 per cent after it said on Tuesday an unauthorized third party had accessed and removed data from its systems, providing details regarding the cyberattack in August first reported by Reuters.
The company said it is evaluating the nature and scope of information that was removed, but added that the incident is not reasonably likely to have a material impact.
The incident had caused disruptions and limited access to portions of its business applications, the Houston-based company said.
The company activated its cybersecurity response plan and launched an investigation internally with the support of external advisors to assess and remediate the unauthorized activity once it became aware of the issue, it said.
U.S energy firms have suffered multiple cyberattacks, including ransomware attacks, in recent years. In 2021, Colonial Pipeline was forced to pay US$4.4-million in ransom as its executives were not sure about the severity of the breach.
With files from staff and wires