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Hedge-fund manager Anson Advisors Inc. is asking the Toronto Stock Exchange to intervene in a planned refinancing of troubled Acasta Enterprises Inc. by the company’s newly minted co-CEOs.

Anson took aim Tuesday at a proposal that would see Acasta co-chief executives Charles and Richard Wachsberg, who are twin brothers, convert $4.8-million of high-yield debt in a company they indirectly control into 6.5 million additional Acasta shares. Toronto-based Acasta was once Canada’s largest special acquisition corporation, or SPAC, with a $402-million war chest and an all-star list of backers, but now sports a market capitalization of just $55-million.

Last week, Acasta announced the debt-for-equity swap and said it would increase the Wachsberg brothers’ stake to 41.2 per cent from 36 per cent. At the time, Acasta said the financing would be “exempt from the formal valuation and minority approval requirements.” Anson, which owns an 18-per-cent stake, said on Tuesday that the TSX should “require that Acasta obtain disinterested shareholder approval” of the transaction.

“The intent and effect of the debt conversion transaction proposed by the Wachsbergs is to transfer value from Acasta and its minority shareholders to themselves,” Anson said in a news release. Anson declined further comment on its request. Acasta executives also declined to comment.

Acasta was originally backed by a long list of business luminaries, including former Onex Corp. executive Tony Melman, former federal Liberal cabinet minister Belinda Stronach and CEOs from banks, industrial companies and airlines. The SPAC went public at $10 a share in 2015, and now changes hands at 85 cents. All of Acasta’s original backers have lost money on the SPAC: Their paper losses run from $1-million to $15-million.

In 2016, Acasta acquired a collection of businesses for $1.1-billion. It borrowed heavily to buy an aircraft leasing firm, a company that made laundry soap and dishwasher detergent and a private-label shampoo and soap maker named Apollo Health & Beauty Care Inc., which was owned by the Wachsberg brothers. The SPAC paid $390-million for Apollo, with 63 per cent of the purchase price paid in Acasta shares and the remainder in cash. Most of those businesses were subsequently sold to pay down debt, and Acasta’s founder departed, until only Apollo was left in the fold.

In late December, Acasta announced that its board members and the Wachsbergs “were not able to agree on strategy going forward,” and all of its directors stepped down. A new board was appointed, consisting of financier Stan Bharti, Carlo LiVolsi, Jeffrey Spiegelman, Richard Wachsberg and Charles Wachsberg. The new board appointed the Wachsbergs as co-CEOs. Charles Wachsberg and Mr. Barti are also both directors of oil and gas company Blue Sky Energy Inc.

In Tuesday’s news release, Anson said Acasta worked on a potential sale of Apollo in December that would have generated enough money to pay down all of the SPAC’s remaining debt and provide equity holders with $1.48 a share. That transaction died when the board of directors was replaced.

Anson said the new board and the new CEOs were appointed “without any prior consultation with shareholders and without any disclosure being provided to shareholders about the qualifications and experience of those individuals.”

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