Dividend Cut/Suspension #4 of 2020

 

Hi folks I’m back to share with you another dividend cut/suspension I received with you. On Monday April 6th, Chorus Aviation announced some significant measures to help the liquidity of the company during these difficult times for the world and aviation sector.

Chorus’s main customer and partner Air Canada has cut capacity in the in second quarter by 85 to 90% which means Chorus’s flying is cut by a similar amount. Also in the company’s leasing division pretty much all of their customers have asked for relief on the rent of the planes they have.  They were also expecting to take delivery of new planes from Bombardier this year now that is delayed as well as customers accepting new planes to their fleet which will have a significant impact to the finances of Chorus.

After having these things happen Chorus has chosen to take the following measures:

• Suspend dividend and drip program – will save $77 million
• Opened a new US$100 million credit facility with Export Development Canada.
• Raising an additional US$30 to $50 million in financing
• Laying off staff
• CEO forgoing 70% of salary
• Executive team forgoing 50% of salary
• Board of Directors taking a 25% reduction in fees

 

Because the dividend was suspended instead of cut I believe once the aviation sector bounces back the dividend will be reinstated. Chorus at the time of this decision was paying a monthly dividend of $0.04 or $0.48 annualized.

I currently own 509 shares and my income will be dropping by $20.36 beginning in May. If the suspension lasts a year I will lose $244.32.

Thanks

Matthew