(Bloomberg) — CI Financial Corp. has begun the process of listing its US wealth management unit, a key step in its plan to deleverage and separate its Canadian and US businesses.
The US arm, which manages about CA$183 billion ($134 billion) in client assets, has confidentially filed a draft registration statement with the Securities and Exchange Commission for an initial public offering, according to a statement Thursday.
“The Company announces at this time that it is responding to numerous requests for an update on the status of the filing, the content of which remains confidential,” Toronto-based CI said in the statement. It hasn’t yet decided how many shares to sell or at what price.
Read more: CI Financial splits up units in US and Canada amid mounting debt concerns
CI Financial plans to use the proceeds from the IPO to improve its balance sheet, which as of September 30 had nearly CA$4 billion (US$3 billion) in debt. CI has announced it will no longer use cash from its Canadian operations to fund acquisitions for its US arm.
The fund manager’s borrowing, built up in an acquisition spree from US-registered investment advisory firms in recent years, has become a concern for analysts and investors. Last month, CI sold CA$400 million in bonds at a yield of 7%, similar to the yield on another company’s junk-rated debt deal around the same time. CI Remains Investment Grade by S&P Global Ratings; it is BBB- with a negative outlook.
CI shares fell 1% to CA$13.61 in Toronto on Thursday. They’re down about 48% this year.
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