Business Context and Reporting Period
This Form 6-K filing by Canadian Pacific Railway Limited (CP) and CP Ships Limited (CP Ships) announces the establishment of voluntary Odd-Lot Selling Programs. The filing date is November 18, 2002. The programs are designed for shareholders holding 99 or fewer common shares of either or both companies as of the record date of November 7, 2002. The programs are administered by Computershare Trust Company of Canada and executed through Scotia Capital Inc. on the Toronto Stock Exchange.
Key Financial Metrics
The filing does not contain operational financial statements, revenue, profit, cash flow, or debt metrics. The only financial data provided relates to share pricing and program costs:
- CP Share Price (Nov 7, 2002): Closed at CDN $32.02 on the TSX. 52-week range: CDN $26.93 - $37.98.
- CP Ships Share Price (Nov 7, 2002): Closed at CDN $18.27 on the TSX. 52-week range: CDN $13.60 - $19.90.
- Brokerage Fees: The companies will pay all brokerage commissions for shares sold under the program.
- Lost Certificate Cost: A surety bond premium of CDN $1.50 (or US $1.00) per share will be deducted from proceeds if a share certificate is lost or destroyed.
Material Changes
The filing does not report material changes to the companies' financial condition or operations compared to prior periods. The primary change is the initiation of the Odd-Lot Selling Program to facilitate the sale of small shareholdings without brokerage fees for the shareholder.
Guidance, Outlook, and Risks
Program Mechanics:
- Eligibility: Registered or beneficial owners of 99 or fewer shares as of November 7, 2002.
- Duration: The program runs until February 7, 2003, unless extended.
- Sale Process: Shares are sold in the open market. Orders are placed on Thursdays for documents received by the preceding Tuesday. Participants receive the average price of all shares sold on that day.
- Payment: Proceeds are mailed approximately 10 business days after the sale. Shareholders may elect to receive funds in Canadian or U.S. currency (default is Canadian).
- Irrevocability: Once a Letter of Transmittal is received, the sale is irrevocable with no withdrawal rights.
- Price Risk: The companies and agents do not guarantee the price obtained for the shares.
- Intermediary Fees: While the companies pay the broker's fee, shareholders holding shares through a broker or bank may still be charged a fee by that intermediary for depositing shares into the program.
- Lost Certificates: Shareholders with lost certificates must pay a surety bond premium and complete an affidavit.
- Tax Consequences: Tax implications vary by shareholder; the companies make no representations regarding tax consequences.
Management states the program is voluntary and makes no recommendation regarding participation. The decision should be based on individual financial objectives.
Investor Verification Checklist
- Verify share ownership status as of the record date (November 7, 2002) to confirm eligibility (99 or fewer shares).
- Confirm whether shares are held in registered or beneficial (broker) form to determine the correct submission procedure.
- Check for potential fees charged by personal brokers or banks for processing the transfer, even though the company covers the sale commission.
- Review the deadline for submission (February 7, 2003, at 4:30 PM MST) to ensure timely participation.
- Consult a tax advisor regarding the capital gains or loss implications of selling the shares.