Q: Can you please provide your insight with respect to RCI.B ‘ s equity offering of $7 billion to reduce debt ? The stock today is down $2.
How this will impact the shareholders ?
Thanks.
How this will impact the shareholders ?
Thanks.
5i Research Answer:
The strructured financing is one thing, but the company also reported earnings, with topline revenue slightly missing estimates. EPS was $1.42 vs $1.36 estimates; But revenue was $5.13B missing estimates of $5.16B. EBITDA was in line at $2.55B. The revenue miss largely reflects a drop in mobile subscribers. 2024 guidance was affirmed. The financing deal with an undisclosed investor will 'materially reduce leverage' and de-risks the company somewhat, but at the cost of some dilution. We would view it more positively than negatively, and the stock decline is likely more connected to the Q3 results.