Aimia loses board members, suspends dividends
Montreal-based loyalty program operator Aimia has announced the resignation of three of its board members: Joanne Ferstman, Alan Rossy and Beth Horowitz. According to Aimia, the departures are part of an ongoing effort to "simplify and focus the business" and reduce operating costs. Ferstman joined the board of directors in 2005, while Rossy joined in 2007 and Horowitz joined in 2012. Aimia's board now consists of nine members.
In related news, Aimia has suspended the payment of all dividends, including previously declared dividends scheduled to have been paid on June 30. In a statement, the company declared that it cannot satisfy the capital impairment test set out in its corporate statutes by June 30. It states that this legal test must be passed before any dividends can be paid. The company cites the decline in its market capitalization following the non-renewal of its Air Canada contract in May as the primary cause of this failure.
"The company currently has the requisite liquidity to pay these dividends, however the statutory capital impairment test legally prohibits us from doing so," said Robert Brown, executive chairman of Aimia. "Our business continues to perform well and generate strong free cash flow. We reported $331.7 million of cash and cash equivalents, restricted cash and short-term investments and $225.5 million of long-term investments in corporate and government bonds as at March 31, 2017."