The Caisse de dépôt wants to become a shareholder of Gildan again

The Caisse de dépôt wants to become a shareholder of Gildan again
The Caisse de dépôt wants to become a shareholder of Gildan again

The Caisse de dépôt et placement du Québec (CDPQ) wants to become a major Gildan shareholder again, just two years after having sold all its shares because the Montreal company was not, in its opinion, paying enough tax.

• Read also: Gildan: the boss preferred to build his golf course in Barbados rather than work

The company’s management announced Wednesday that Gildan intends to issue $200 million in senior unsecured notes to CDPQ as part of a private placement.

The clothing manufacturer plans to use these amounts to buy back shares and repay part of its debt which is coming due.

The loan from the Caisse is, however, conditional on Gildan maintaining its head office in Quebec for at least seven years and agreeing to pay the global minimum tax rate of 15%.

However, the Caisse had divested itself of all its shares in the company two years ago, judging that it was not paying its fair share of tax.

The Fund takes sides

A war for control of the company has been in full swing since the firing of the company’s founder and CEO, Glenn Chamandy, last December.

Since then, shareholders, led by the American firm Browning West, have led a revolt to demand the return of Mr. Chamandy.

In this context, the Caisse’s investment marks its support for Gildan’s current board of directors, a few weeks before the shareholder vote at the company’s annual meeting on May 28.

“With its renewed board of directors and its new CEO, Gildan has the right business plan and is making clear commitments to maintain its head office in Quebec and to pay the global minimum tax,” declared Kim Thomassion , first vice-president and head for Quebec of the CDPQ.

“This is why the CDPQ decided to support the growth of this large Quebec company. This is a first step towards a broader partnership with our intention to become a significant shareholder of the company in this new context,” she added.

However, as the Caisse does not hold any Gildan shares, it will not vote at the general meeting on May 28.

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