Mithaq Warns Aimia Shareholders of Potential for Board Misconduct at Upcoming Annual General Meeting
Mithaq formally requested on
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
- 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 thatMr. Mittleman was terminated for undisclosed reasons and without any succession plan in place. The Board has yet to find a replacement forMr. 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 withPaladin Private Equity, LLC ("Paladin") that were terminated inMay 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 onMay 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 theMalaysian stock exchange . Moreover, these shares could have been liquidated inOctober 2023 when they were trading at a higher price leading up toAimia'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 withAimia 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 leastSeptember 2023 . Since then,Aimia has issued 15 million additional common shares to friendly parties at prices significantly below reported net asset value per share.
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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
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,
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.
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SOURCE Mithaq Capital SPC