Manulife Financial CEO Dominic D'Alessandro warned yesterday about a looming fourth-quarter loss of $1.5 billion and unveiled his plans to raise capital by selling over $2 billion in common shares.
This quarterly loss would be Manulife's largest since 1999. The massive stock sale represents a complete flip-flop for D'Alessandro, the outgoing chief executive, who dismissed the idea of this kind of share sale just weeks ago.
D'Alessandro said last month that a $3 billion term loan from Canada's largest banks would be enough to bolster Manulife's capital position, however now the company plans to reduce the size of that credit facility to $2 billion, choosing to raise their own capital through the share sale.
Investors in the blogosphere and mainstream media appeared unimpressed with the decision as Manulife's shares lost 2.79 % or $0.57 to $19.89 during heavy trading on the TSX.
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