Author Topic: AIM.TO - Aimia  (Read 183110 times)

wabuffo

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Re: AIM.TO - Aimia
« Reply #720 on: June 22, 2020, 05:46:08 PM »
so I'm still betting on that happening sooner than later.  and if UAL's prices and trades well, probably a lot sooner.

I think it would be a huge missed opportunity if they don't do it - sooner rather than later.  My only concern is that Aeromexico may have less of an incentive to do it since it wouldn't net them any new cash.  Based on the benchmarks with United's MileagePlus deal, PLM could safely do $200m USD - which would net Aimia $100m, but would only wipe out Aeromexico's debt to PLM.   

One option could be that Aeromexico converts the $50m loan portion of the previous deal with PLM to a $50m seat payable (like the other half) and takes a $100m further distribution in the recap. 

We'll see I guess.  Here's hoping that you are correct.

wabuffo


Dr. Aybolit

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Re: AIM.TO - Aimia
« Reply #721 on: June 23, 2020, 08:41:59 AM »
i think they could do a bit more than US$200M, maybe US$250M (would be 3.5x EBITDA of US$70M), so there could be net new cash to AM.  but even if the leveraged recap just pays off AM's debt to PLM, that is a net deleveraging of AM's balance sheet, so that is important to them and I'd bet it's part of whatever targeted deleveraging program they are pitching around to their various creditors.

so hopefully my theory is correct and that is incentive enough for them to move forward with leveraged recap asap after the UAL gets done.

meanwhile the insider buying at Aimia continued yesterday, which i really like to see.  https://www.insidertracking.com/node/7?menu_tickersearch=Aimia+%7C+AIM*CA

the hyperlink above left off the last three characters, will re-paste here in hopes it works better this time:  https://www.insidertracking.com/node/7?menu_tickersearch=Aimia+%7C+AIM*CA

nope, didn't work.  anyway just cut and paste the entire link, works that way.


« Last Edit: June 23, 2020, 09:05:34 AM by Dr. Aybolit »

wabuffo

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Re: AIM.TO - Aimia
« Reply #722 on: June 26, 2020, 04:46:12 AM »
https://www.sec.gov/Archives/edgar/data/100517/000110465920077050/tm2023500d1_ex99-1.htm

United's MileagePlus loyalty program upsizes its debt offerings to $6.8b from initial $5b due to high demand.  Its made up of:
(a) $3.8 billion in principal amount of 6.50% senior secured notes due 2027, and
(b) $3.0 billion term loan facility

Based on 2019 net income benchmarks vs MileagePlus, PLM could issue well over $300m USD in debt.   This may get Aeromexico's attention since it would mean $150m in distributions to Aeromexico and AIMIA.

wabuffo

Philbert77

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Re: AIM.TO - Aimia
« Reply #723 on: June 29, 2020, 10:09:15 AM »
Anyone know why trading is halted?

Homestead31

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Re: AIM.TO - Aimia
« Reply #724 on: June 30, 2020, 12:39:10 PM »
the audio from an investor call with TD is available on Aimia's IR website:  https://corp.aimia.com/investors/events-presentations/

it is worth a listen, with a few new nuggets of information.

Of note:
- a dividend recap at PLM isn't possible until PLM re-domiciles.  Sounds like that is in the works, and presumably recap will happen after that.
- details on what strained the relationship between former Aimia management and Aeromexico
- commentary on why Aeromexico did not want to invest properly in PLM prior to establishing a mechanism to complete a takeout. In other words, there was a conflict for Aeromexico (and delta) because they didn't want to build the business, and then later have to buy it out at a higher level, so they were incentivized to under invest
- thoughts on an Aeromexico bankruptcy "we've treated this investment as if they are going to file bankruptcy next week"
- hints on synergies between Kognitiv and Aimia's former loyalty assets
- comments on Clear Media
- thoughts on continuing to buy back stock.  unrelated, they announced this morning that they are putting buybacks on autopilot, which possibly suggests there are other things in the works

its an hour long call so there is more there as well.  those were just things that stuck in my head, but i think the management team is doing all the right things.  also nice to see them out telling the story with the sell side.  i assume that will only accelerate as management realizes that the prior management team's incompetence put a stink on the stock that needs to be eliminated

wabuffo

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Re: AIM.TO - Aimia
« Reply #725 on: June 30, 2020, 01:11:16 PM »
it is worth a listen, with a few new nuggets of information.

I listened to it - some of my thoughts.  Let me be the devil's advocate.

- the new mgmt team "pumps" relentlessly.  I'm glad they're accessible.  But they are pushing too hard.  A bit of modesty is in order.  When Lehman (sp) called out Mittleman's investing record as impressive and one of the best in the biz, he's clearly not looking at the same 10-year record that I'm looking at.   Its a bit of a red flag when a mgmt exec says the sky is blue (when it is verifiably cloudy just by looking out the window).

- They also really danced around the Mittleman Investment Partnership selling by their LPs due to the deal.   

- Kognitiv sounded like it was on the rocks (failed funding round, cutting price to save it, etc) before it was pitched to AIMIA.  I wonder exactly how much time they spent on how to operationally put this together.  Doesn't sound like much.  Instead it sounds like Kognitiv was desperate for funding, AIMIA was desperate to jettison ILS - hey, let's put our two failing ventures together - I'm sure that will work.   ILS brings in a shit-ton of personnel and overhead, Kognitiv doesn't appear to have much in revenue (they are a B-2-B loyalty market where Kognitive takes a cut - can't be more than a few million in annual revenues).  What happens when there is another capital call (which there will be given the cash incineration here).   Will AIMIA answer that bell?  That will be telling, I think.

- I still think Aeromexico took AIMIA to the cleaners on their deal.  I've said enough on this matter.  Redomiciling isn't a show-stopper.  Aeromexico was in weak position and desperate for cash.  AIMIA had the "nuts" and checked down.

- they are clearly not going to retire the preferred shares, probably ever.  No intention to buy out - even if there is an event of liquidity (like a PLM buyout by Aeromexico of AIMIA's) stake.

This is a bit of a race with time.  They are rapidly spending their cash on buybacks, plus illiquid investments with no incoming dividend stream (ClearMedia, Kognitiv), PLM is on the shelf with no dividends.  Yet they still have expensive overhead and preferred dividends (plus tax) to pay out.   They need an event of liquidity and have too small a capital base to take something completely over in order to use their NOLs.   

I think this is a single-digit return over the next five years (which I assume will have a PLM liquidity event at the end of that five year period - if things work out best case).  I'd be happy to be wrong about that.

wabuffo
« Last Edit: June 30, 2020, 01:36:54 PM by wabuffo »

Philbert77

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Re: AIM.TO - Aimia
« Reply #726 on: June 30, 2020, 01:17:04 PM »
What do you mean by "stiff the preferred dividends"? Like stop paying them like happened a couple years ago?

wabuffo

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Re: AIM.TO - Aimia
« Reply #727 on: June 30, 2020, 01:21:52 PM »
What do you mean by "stiff the preferred dividends"? Like stop paying them like happened a couple years ago?

Sorry - poor wording on my part.   Basically they are leaving them outstanding forever while paying the dividends.   Even though they can make another tender offer at below par - they were pretty clear they are never doing that.

wabuffo
« Last Edit: June 30, 2020, 01:25:36 PM by wabuffo »

Pref User

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Re: AIM.TO - Aimia
« Reply #728 on: June 30, 2020, 03:21:19 PM »
Listen to the call. I followed up by talking to a tax expert, granted not a lot of experience with Mexican tax law. But from their experience when a Canadian company change domiciles it is considered a sale, which triggers capital gains. Now I have no clue if Mexico has this law in place, but if it does it means that a dividend recap might not be worth it.

It also has me wondering if Aeromexico knew this and took advantage of Aimia in this respect. Just something to think about.

wabuffo

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Re: AIM.TO - Aimia
« Reply #729 on: June 30, 2020, 05:14:27 PM »
https://www.wsj.com/articles/aeromexico-files-for-debt-restructuring-under-chapter-11-11593560968

Aeromexico Files for Debt Restructuring Under Chapter 11

Quote
MEXICO CITY—Mexican airline company Grupo Aeroméxico SAB said Tuesday it has filed for voluntary restructuring under chapter 11 of the U.S. bankruptcy code to confront the crisis brought on by the coronavirus pandemic.

Aeromexico says thank you AIMIA & PLM for the $100m and then files.  ???

wabuffo
« Last Edit: June 30, 2020, 05:28:44 PM by wabuffo »