Aimia sells non-core assets to bolster balance sheet

             This is another of those slightly unusual situatuons that are best covered in Workathon instead of Blogdaleupsome.Aimia is in a bit of a credit crunch and so did what most other companies would do.They sold off (and may still be selling off) some non-core assets.In this case they sold their Nectar business with joint owner Sainsbury's.Sainsbury's sells grocery, financial,energy, clothing and general merchandise.And Nectar is their largest issuance and redemption partner.Nectar and their research business plus 50% of their stake in Sainsbury's was sold for $105 million. There was no mention of the net proceeds from the transaction.    

               Other non-core Assets
        Aimia is not completely cornered yet as it has a few cards in it's hand to play.It's financial statements show $100 million of investments in unconsolidated assets and a further $400 million of other investments(including government bonds).Down the road these may be disposed of for working capital or repayment of debt.Their latest press release shows $208 million of debt remaining on their balance sheet.If push comes to shove some of these assets may be sold off but the profit recorded will vary with the strength of Aimia's hand.
             A Weird Press Release
           This press release talks about a$174 million transfer of cash and a working capital settlement.If their Nectar loyalty business was sold there would be no cash involved they would merely be maintaining a reserve fund for redemptions.If there was a  cash transfer then maybe Aimia has a small position in Sainsbury's which is a  $5.5 billion company.But this is unlikely in Aimia's present position.More than likely this is the kind of press release that one puts out on April1.Selling off non-core assets is just what Aimia should be doing in order to bolster it's position before June 2020.As Aimia still does not have an amended agreement with Air Canada as this blog has suggested.However if there is any substance to this  press release it will all be detailed in their upcoming first quarter report.
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