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Aimia Inc. AIM-T is facing a revolt from its largest shareholder.

Mithaq Capital SPC, a family office based in Saudi Arabia that owns nearly 20 per cent of Toronto-based Aimia, announced plans Thursday to vote against the re-election of the company’s entire board of directors.

Aimia, which sold its flagship Aeroplan loyalty program to Air Canada in 2019 for $516-million, has recently sought to reinvent itself as an investment holding company.

All eight Aimia directors – including chief executive officer Phil Mittleman and president Michael Lehmann – will need to win majority shareholder support at the company’s annual meeting on April 18 to remain on the board, according to recent amendments of the Canada Business Corporations Act. With Mithaq now opposing the entire slate, the incumbent directors will need support from close to two-thirds of Aimia’s remaining shareholders.

In a statement, Mithaq said it has lost confidence in the board and the management team, and that “it would be in the best interests of Aimia to reconstitute the board.”

The reasons underlying Mithaq’s opposition “include concerns previously raised with Aimia regarding capital allocation decisions relating to acquisitions,” the statement said.

Aimia spokesperson Albert Matousek said the company “will be responding accordingly” to Mithaq and declined to comment further.

Mithaq is not planning to nominate any replacement candidates and declined to comment further on what exactly motivated it, though Aimia has recently made its two largest acquisitions since pivoting away from loyalty programs.

In January, Aimia bought Tufropes Pvt. Ltd. for $253-million. India-based Tufropes makes synthetic fibre ropes and netting for the aquaculture and maritime industries. Then last month, the company paid $332-million for Italian chemical company Giovanni Bozzetto SpA.

“These two companies will form the backbone of our strategy to continue to acquire businesses that generate significant cash flow,” Mr. Mittleman said during a March 16 conference call, noting Tufropes and Bozzetto generated a combined $72-million in adjusted earnings before interest, taxes, depreciation and amortization during their most recent fiscal years.

In 2020, Aimia paid $76-million for an 11-per-cent stake in Chinese outdoor advertising firm Clear Media Inc. That was the company’s first major transaction after the sale of its Aeroplan loyalty program.

The same year, Aimia spun off its remaining money-losing loyalty business in a merger with Waterloo, Ont.-based Kognitiv in exchange for a 49-per-cent stake in that company. Kognitiv has been steadily narrowing its losses but has yet to achieve profitability.

In 2021, Aimia invested $76-million in Trade X Group of Cos., which produces software for the used car industry. Aimia also swapped its holdings in AirAsia’s loyalty rewards program that year for $31-million worth of that company’s shares.

Mithaq has amassed a significant portion of its stake in Aimia very recently. While the family office holds 19.9 per cent of Aimia’s outstanding common shares, that figure was only 12.6 per cent as of Feb 1.

Over the course of its transformation, Aimia’s work force has shrunk dramatically to about 20 people as of late 2020 from roughly 450. In its most recent quarter, Aimia reported a net loss of $23.3-million, which was roughly 60-per-cent wider than the $14.6-million loss the company reported during the same period a year earlier.

Follow Jameson Berkow on Twitter: @JamesonBerkowOpens in a new window

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