TORONTO, June 13,
2024 /CNW/ - Mithaq Capital SPC ("Mithaq"),
the largest shareholder of Aimia Inc. (TSX: AIM) ("Aimia"),
today provides a warning to Aimia shareholders that it is very
concerned about potential misconduct by the current board of
directors (the "Board") at the upcoming annual meeting of
Aimia shareholders to be held on June 26,
2024 (the "Meeting"). As acknowledged by Aimia in its
press release dated June 3, 2024,
Mithaq has nominated six individuals (the "Mithaq Nominees")
for election to the Board at the Meeting pursuant to Aimia's
advance notice by-law (by-law no. 2013-1). Mithaq has ownership of,
or control or direction over, a total of 26,893,588 common shares
of Aimia, representing approximately 26.98% of the issued and
outstanding common shares.
Mithaq formally requested on June 5,
2024 that Aimia cooperate with Mithaq in advance of the
Meeting by setting certain protocols and procedures to avoid the
extravagant legal and other advisor expenses incurred by Aimia
unnecessarily following the 2023 annual general meeting (the
"2023 AGM"). Aimia has since refused Mithaq's requests other
than to confirm that the Meeting will have an independent chair
whose identity remains undisclosed. Establishing the protocols and
procedures requested by Mithaq is customary in the context of a
contested shareholder meeting and the Board's refusal to cooperate
indicates a concerning lack of respect for shareholder democracy
and good governance. Coupled with evidence obtained by Mithaq
regarding the apparent inappropriate influencing of proxies
submitted in connection with the 2023 AGM, shareholders should be
concerned about similar misconduct at the Meeting.
At this time, Mithaq is reserving its right to seek assistance
from the courts to ensure the conduct of the Meeting complies with
applicable corporate and securities laws.
THE BOARD'S DISAPPOINTING TRACK RECORD AND QUESTIONABLE
PLANS
Aimia's past and current Board members have demonstrated nothing
but a desire to entrench themselves at the expense of Aimia
shareholders and in breach of their fiduciary duties. In response
to the so-called strategy and accomplishments articulated by Aimia
in its press releases dated May 31
and June 3, 2024, Mithaq notes
that:
- The two million dollars in annual
executive compensation expenses that were eliminated presumably
relate to the departure of former Chief Executive Officer,
Phil Mittleman. That the Board is
taking credit for this implies that Mr. Mittleman was terminated
for undisclosed reasons and without any succession plan in place.
The Board has yet to find a replacement for Mr. Mittleman and the
associated cost savings will be temporary until such a replacement
is found.
- The $20 million liability that
was eliminated presumably refers to arrangements with Paladin
Private Equity, LLC ("Paladin") that were terminated in
May 2024. In Mithaq's view, Aimia
drastically overpaid to terminate these arrangements, which were
primarily based on future performance that had not been achieved.
Moreover, as partial consideration, Aimia issued five million
common shares to Paladin immediately before the record date for the
Meeting. Aimia had ample cash to pay Paladin, as shown by the
announcement of a $32.9 million
earn-out payment and intention to launch a normal course issuer bid
on May 29 and 30, respectively. Aimia
has not provided adequate disclosure to shareholders about its
process for negotiating the arrangements, which constitute a
"related party transaction" under applicable securities laws.
- While Mithaq is supportive of harvesting capital from
low-return businesses, the monetization of $11 million of Capital A shares is hardly an
accomplishment given these are liquid securities that trade on the
Malaysian stock exchange. Moreover, these shares could have been
liquidated in October 2023 when they
were trading at a higher price leading up to Aimia's dilutive
private placement of 10,475,000 common shares and 10,475,000 common
share purchase warrants.
- The $32.9 million earn-out
payment from the PLM transaction was negotiated in 2022 at a time
before the majority of the current Board members were involved with
Aimia in any capacity and is therefore not a current Board
accomplishment.
- Although Aimia has renewed its normal course issuer bid, it has
communicated share buybacks as a key priority since at least
September 2023. Since then, Aimia has
issued 15 million additional common shares to friendly parties at
prices significantly below reported net asset value per share.
VOTE FOR CHANGE
Mithaq has a clear 10-step plan to get Aimia on track, which is
set out in detail in Mithaq's letter to shareholders dated
June 3, 2024 available on Aimia's
profile on SEDAR+ at www.sedarplus.com. Shareholders are encouraged
to read Mithaq's letter and the accompanying circular (the
"Mithaq Circular") in their entirety in advance of the
Meeting.
Aimia shareholders willing to express their support for the
Mithaq Nominees should vote using the GOLD form of
proxy or GOLD voting instruction form accompanying the
Mithaq Circular prior to 5:00 p.m.
(Toronto time) on Friday, June 21, 2024. Shareholders who have
questions or require assistance may contact Mithaq's proxy
solicitor, Carson Proxy, for more information by North American
toll-free phone at 1-800-530-5189, local phone or text at
416-751-2066 or by email at info@carsonproxy.com.
ADVISORS
Mithaq has retained Carson Proxy as its proxy solicitor. Torys
LLP is acting as legal counsel.
ABOUT MITHAQ
Mithaq is a segregated portfolio company and affiliate of Mithaq
Holding Company, a decentralized family office
headquartered in Saudi Arabia with investments in public
equities, private equity, real estate and income-producing assets
in local and international markets.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION
This document contains "forward-looking statements" (as
defined under applicable securities laws). These statements relate
to future events or future performance and reflect Mithaq's
expectations, beliefs, plans, estimates, intentions, and similar
statements concerning anticipated future events, results,
circumstances, performance or expectations that are not historical
facts. Forward-looking statements include, but are not limited to,
statements in respect of the conduct of the Board at the Meeting
and the impact of the Mithaq Nominees, if elected, on the financial
condition, results of operations and business strategies of Aimia,
including specifically in connection with Mithaq's plans for Aimia,
and other matters. Such forward-looking statements reflect Mithaq's
current beliefs and are based on information currently available.
In some cases, forward-looking statements can be identified by
terminology such as "may", "will", "should", "expect", "plan",
"anticipate", "believe", "estimate", "predict", "potential",
"continue", "target", "intend", "could" or the negative of these
terms or other comparable terminology.
By their very nature, forward-looking statements involve
inherent risks and uncertainties, both general and specific, and a
number of factors could cause actual events or results to differ
materially from the results discussed in the forward-looking
statements. In evaluating these statements, readers should
specifically consider various factors that may cause actual results
to differ materially from any forward-looking statement. These
factors include, but are not limited to, Aimia's results of
operations and future cash flows; the future performance, business
prospects and opportunities of Aimia; the election of the Mithaq
Nominees; the ability of the Mithaq Nominees, if elected, to effect
positive change at Aimia; the implementation and impact of Mithaq's
plans for Aimia; the response to and outcome of any court
applications that may be made against Mithaq or Aimia; the
implementation and timing of Aimia's business strategy; the current
general and regulatory environment and economic conditions
remaining unchanged; the availability of financing and capital
costs; Aimia's available cash resources; Aimia's ability to
identify, attract and retain skilled staff; currency exchange
rates; required capital investments; market competition; ongoing
relations with employees and other stakeholders; and general
business and economic conditions.
Although the forward-looking information contained in this
document is based upon what Mithaq believes are reasonable
assumptions, there can be no assurance that actual results will be
consistent with these forward-looking statements. The
forward-looking statements contained in this document are made as
of the date of this document and should not be relied upon as
representing views as of any date subsequent to the date of this
document. Except as may be required by applicable law, Mithaq does
not undertake, and specifically disclaims, any obligation to update
or revise any forward-looking information, whether as a result of
new information, further developments or otherwise.
Neither Mithaq nor or any of its subsidiaries, affiliates,
associates, officers, partners, employees, representatives and
advisers make any representation or warranty, express or implied,
as to the fairness, truth, fullness, accuracy or completeness of
the information contained in this document or otherwise made
available, nor as to the reasonableness of any assumption contained
herein, and any liability therefore (including in respect of
direct, indirect, consequential loss or damage) is expressly
disclaimed. Nothing contained herein is, or shall be relied upon
as, a promise or representation, whether as to the past or the
future and no reliance, in whole or in part, should be placed on
the fairness, accuracy, completeness or correctness of the
information contained herein.
SOURCE Mithaq Capital SPC