EXECUTION OF SUPPORT AGREEMENT WITH LARGEST
PREFERRED SHAREHOLDER TO TENDER ITS
PREFERRED SHARES
EXCHANGE OF PREFERRED SHARES FOR NOTES
EXPECTED TO GENERATE ANNUAL CASH SAVINGS OF
APPROXIMATELY $8 MILLION
TORONTO, Nov. 11,
2024 /CNW/ - Aimia Inc. (TSX: AIM)
("Aimia" or the "Company") today announced that its
Board of Directors has authorized the launch of a substantial
issuer bid (the "Offer") pursuant to which Aimia will offer
to purchase for cancellation up to 100% of its Cumulative
Rate Reset Preferred Shares, Series 1 (the "Series 1
Shares"), Cumulative Rate Reset Preferred Shares, Series 3 (the
"Series 3 Shares") and Cumulative Floating Rate Preferred
Shares, Series 4 (the "Series 4 Shares" and collectively
with the Series 1 Shares and the Series 3 Shares, the "Preferred
Shares") in consideration for senior unsecured notes (the
"Notes"). The Company further announces the execution of a
support agreement (the "Support Agreement") with
Phillips Hager and North
("PH&N"), the largest holder of Preferred Shares, to
tender all of its 7.2 million Preferred Shares under the Offer.
The launch of Offer will mark the first initiative introduced as
a result of Aimia's strategic review process designed to unlock the
Company's value.
As agreed with PH&N under the Support Agreement:
(i) The Offer will be based on
the following exchange considerations:
- Series 1 Shares: $17.00 per
Series 1 Share;
- Series 3 Shares: $17.50 per
Series 3 Share; and
- Series 4 Shares: $18.4375 per
Series 4 Share.
(ii) The Notes will:
- Have a par value of $100, and be
issued at a value of 97% to par;
- Bear interest at a coupon of 9.75%, payable semi-annually;
and
- Mature in five years with no annual amortization payments.
(iii) Subject to limited
conditions, Aimia will have the option to pay interest in kind, for
a premium of 150 basis points to the cash coupon interest rate, any
time.
(iv) The Notes will be senior
unsecured obligations of the Company
Assuming that all preferred shareholders tender to the Offer,
the Offer will result in (i) approximately $8 million in annual cash savings when comparing
the annual preferred dividends and Part VI.1 tax to the annual cash
coupon interest payments, and (ii) approximately $65 million
gain on the transaction, based on the exchange value of the Notes
and the carrying value of the Preferred Shares exchanged net of
transaction fees. Aimia considers this transaction as
accretive to Common shareholders as (i) it reduces cash outflows on
an annual basis, (ii) it increases the net asset value for Common
shareholders and (iii) provides a payment in kind option on the
interest related to Notes.
TD Securities Inc. is acting as financial advisor to Aimia with
respect to the Offer.
The Offer referred to in this news release has not yet
commenced. This news release is for informational purposes only and
does not constitute an offer to buy or the solicitation of an offer
to sell Preferred Shares. An offer to purchase the Preferred Shares
in consideration for Notes will only be made pursuant to a formal
offer to purchase and issuer bid circular, together with the
related letter of transmittal and notice of guaranteed delivery
(the "Offer Documents"). The Offer Documents, which will contain
the terms and conditions of the Offer and instructions for
tendering Preferred Shares, are expected to be sent to shareholders
and filed with the applicable Canadian securities regulatory
authorities and made available on SEDAR+ at
www.sedarplus.ca within the next 30 days. The Offer will
not be made to, nor will tenders be accepted from or on behalf of,
holders of Preferred Shares in any jurisdiction in which the making
or acceptance of offers to purchase Preferred Shares for Notes
would not be in compliance with the laws of that
jurisdiction. None of Aimia, its Board of Directors or TD
Securities Inc. makes any recommendation to shareholders as to
whether to tender or refrain from tendering any or all of their
Preferred Shares to the Offer. Shareholders are urged to read the
Offer Documents, when available, carefully and in their entirety,
and to consult their own financial, tax and legal advisors and to
make their own decisions with respect to participation in the
Offer.
About Aimia
Aimia Inc. (TSX: AIM) is a diversified company focused on
unlocking the growth potential of its two global businesses,
Bozzetto, a sustainable specialty chemicals company, and Cortland
International, a rope and netting solutions company. Headquartered
in Toronto, Aimia's priorities
include monetizing its non-core investments, enhancing the value of
our core holdings, returning capital to its shareholders, and
efficiently utilizing its loss carry-forwards to create shareholder
value.
For more information about Aimia, visit www.aimia.com.
Forward-Looking Statements
This press release contains statements that constitute
"forward-looking information" within the meaning of Canadian
securities laws ("forward-looking statements"), which are
based upon Aimia's current expectations, estimates, projections,
assumptions and beliefs. All information that is not clearly
historical in nature may constitute forward-looking statements.
Forward-looking statements are typically identified by the use of
terms such as "anticipate", "believe", "could", "estimate",
"expect", "intend", "may", "plan", "predict", "project", "will",
"would" and "should", and similar terms and phrases, including
references to assumptions.
Forward-looking statements, by their nature, are based on
assumptions and are subject to known and unknown risks and
uncertainties, both general and specific, that contribute to the
possibility that the forward-looking statement will not occur. The
forward-looking statements in this press release speak only as of
the date hereof and reflect several material factors, expectations
and assumptions. Undue reliance should not be placed on any
predictions or forward-looking statements as these may be affected
by, among other things, changing external events and general
uncertainties of the business. A discussion of the material risks
applicable to the Company can be found in Aimia's current
Management's Discussion and Analysis and Annual Information Form,
each of which have been or will be filed on SEDAR+ and can be
accessed at www.sedarplus.ca. Except as required by applicable
securities laws, forward-looking statements speak only as of the
date on which they are made and Aimia disclaims any intention and
assumes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.
SOURCE Aimia Inc.