All dividend on both common and selective shares will be suspended by Aimia Inc. instantaneously, together with beforehand acknowledged payments that were to be taken care of at the latter part of this month.
The company which is located in Montreal manages Aeroplan and further compensation program for different firms, with Air Canada being their unique client. According to Aimia, the suspension of the dividend is need as a result of the decision to put a ban on the usage of Aeroplan by Air Canada, and introduce its own reward program in 202 for their customers.
This info caused Aimia’s shares to decline severely, with stocks closing at $1.89, which is less than the one-quarter that were worth before the 10th of last month. After the news about the suspension of the dividend was made public, stocks went down more than 19 per cent, dropping to $1.53 of 36 cents.
A diminishing of funds test which is needed by the Canada Business Corporations Act will have them be an exception towards paying the dividends according to Aimia, despite what the liquidity will do for them. Robert Brown said in a statement; “Our business continues to perform well and generate strong free cash flow.” In the future, shareholders who are eligible to past stated dividends may be paid for.
After Air Canada leaves, Aimia is planning on building new long-term relationships during that time and also have $70 million worth of cost cut down from its firm. The number of board directors will also be reduced to nine members. For the time being, the directors assigned are Beth Horowitz, Joanne Ferstman and Alan Rossy.