RE:RE:AIMIA's view on the Nectar DealLenders are dealing with the Aimia/Aeroplan situation based on the current reality...and this is normal...standard operating procedure, if you will.
Once Aimia/Aeroplan announces a new business strategy as the path forward, then lenders, shareholders, potential investors etc. will respond in a manner that reflects the reality of the situation at that time and based on what the future potential will be for Aimia/Aeroplan.
Looking ahead, the skies are bright and the potential for Aimia/Aeroplan is quite interesting.
pierrelebel wrote: The key paragraph:
"Aimia also obtained the consent of its lenders, as required for the release of one of Aimia's subsidiary guarantors under its senior credit agreement. In connection with this consent, Aimia has reduced its overall debt level with a $100 million repayment made at closing and the overall size of the facility has been reduced to $208 million. In addition, Aimia has agreed to certain amendments to the credit agreement which include amendments(2) in respect of quarterly debt paydowns contingent on positive free cash flow performance, working capital requirements for new borrowings, elimination of the Deferred Revenue Reserve (DRR) Fund alongside insertion of a minimum liquidity covenant, lower leverage covenants, tighter restrictions on common and preferred share dividend payments and revised conditions around acquisitions and disposals.
Having to agree to those added restrictions means Aimia had little wiggle room in those negotiations. Lenders clearly have the upper hand. Not good news for Aimia. Their back was and still is against the wall. Things are not improving.