(Reuters) - The Canadian province of Quebec's securities watchdog said on Thursday it asked Bombardier Inc BBDb.TO to halt stock trades under a plan set up to facilitate share sales by certain senior executives at the company.
The Autorité des marchés financiers (AMF) said in a statement released after markets closed that it is “reviewing” transactions and “various announcements” related to Bombardier’s creation of an Automatic Securities Disposition Plan on Aug. 15.
Automatic Securities Disposition Plans allow executives with insider knowledge to sell their stock based on pre-arranged instructions provided when they are not in possession of any material undisclosed information. Bombardier's plan allowed for certain executives to sell their stock as part of their overall performance-based compensation. (bit.ly/2TdkbeG)
The plane- and train-maker’s stock dropped 5 percent in Toronto trading on Thursday before the AMF’s statement, closing at C$2.09 a share.
Bombardier’s stock plunged after the company reported a disappointing free cash flow forecast on Nov. 8, sending its shares down more than 23 percent on that day.
The AMF would not specify on Thursday why it was taking these steps related to the plan. It asked the company to suspend all sales of securities under the plan until further notice and to notify the executing brokers.
“With the pressure on Bombardier’s stock, preceding and following the release of our financial results on November 8, some had raised doubts about trading that may have occurred in the last months,” Bombardier spokesman Olivier Marcil said in an emailed statement, stating that the AMF is simply doing its job.
Montreal-based Bombardier said in a statement that it intends to “fully cooperate with the AMF in its review,” and will “suspend all sales of securities” related to the plan “until further notice.”
Reporting by Laharee Chatterjee and Saumya Sibi Joseph in Bengaluru and Allison Lampert in Montreal; Editing by Dan Grebler and Grant McCool
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