Good morning, and thank you for joining us today. Earlier this morning, we announced the signing of a definitive agreement for the sale of Bozzetto. We want to take this opportunity to put the transaction into perspective, review upcoming timelines, and answer any questions that you may have about the sale and our planned use of proceeds. Joining me on today's call are Aimia's Executive Chairman, Rhys Summerton, and Aimia's President and CFO, Steven Leonard. Before I begin, I do want to point out a couple of items. We will be using a presentation today, and for those who are listening by phone, a copy of that presentation is available from the IR section of our website. Some of the statements that are made on today's call may constitute forward-looking information, and our future results may differ materially from what we discuss.
Please refer to the risks and uncertainties that may affect our future performance referenced in our presentation. Following today's presentation, please reach out if you do have any outstanding questions or require clarification on any of the matters discussed today. With that, I'd like to turn the call over now to Rhys. Please go ahead, Rhys.
Yeah, thank you, Joe. Good morning, afternoon, everyone. Thought we would have this call to just provide an update after the news of the sale of Bozzetto. If you take a step back, I think it was in the second quarter 2025 where we came across Aimia and got involved, and we rolled out this three-step strategy, which you'll see on slide four if you recall. The first step was reducing the Holdco cost to below 1.5% of Aimia's NAV. Then we would work at reducing the discount that the share price traded at relative to the intrinsic value of Aimia. And then the third, and probably the most value-accretive step, is deploying the capital so that we could utilize the extensive tax losses that we carry at Aimia. So that's where we're going.
We've been pretty clear about that from the start, and I think we've made progress on all fronts. To put that into perspective, we've been able to cut costs at the Holdco level probably around low double digits already, close to CAD 1 million have come off there, and there's still more work to do making that more efficient. But we are heading in the right direction, and Steve's done very good work on that. We've been able to buy back CAD 3 million worth of shares through our NCIB, and we've done a lot of work in determining what we refer to as obtaining the market value on our core holdings. And I think the sale of Bozzetto represents a clear sign of progress towards turning Aimia into the vehicle that it always should have been.
It should be a remarkable permanent capital allocator, and we should be able to start using the tax losses going forward. So we think we've been executing on the strategy well. We'll continue to do that. We understand that there's a lot more work to do. On the next slide, I would take you through the transaction highlights, which is on slide five. Bozzetto, the sale will generate proceeds in the range of CAD 265 million-CAD 271 million at the close, and we will anticipate that the close happens within the next three months. So as mentioned, we expect to use the proceeds towards making investments in other companies and also, importantly, reducing the indebtedness at the Holdco level of Aimia.
We should point out that with more than CAD 500 million of capital tax carried forwards at the end of September 30th, we do not anticipate paying any taxes on the gain from this transaction. We will start utilizing it a little bit in this transaction. This transaction is the culmination of an extensive sales process which we've embarked on, and we are very satisfied with the results of that. Going on to slide six, the question might be, "Why sell Bozzetto?" Given that it's a consistent deliverer of financial results since Aimia has owned it over the last two years, it's a fair question. The rationale becomes clear when we look at some of the limitations to owning Bozzetto.
First, we believe that monetizing the asset and redeploying the proceeds to reduce indebtedness and acquire other companies which are even more undervalued offers a really compelling opportunity to maximize shareholder value. Also, due to its geographic location of Bozzetto's operations and the markets it serves, we were not able to utilize more than CAD 520 million of net operating losses against taxable income that Aimia has. And so we want to get to the position over the next couple of years where we can start utilizing those tax losses. And then equally significant, the structure of Bozzetto's credit facilities limited our ability to upstream cash flow. As a result, our ability to deploy capital, whether to continue with share buybacks or make investments in other operating companies, was limited.
So if you combine all those factors, you'll come to the conclusion that this deal is actually in the best interests of Aimia shareholders and also gets us moving towards unlocking the long-term potential that's within Aimia. So we think this is a good deal. It helps to accelerate our strategy, and we think that we will get to the point where we can really unlock the full potential of Aimia going forward. And this is one of those steps in realizing that ambition. We're now going to hand over to Steve who will take us through more of the details.
Thank you, Rhys, and good morning, everyone. Slide seven illustrates a cash waterfall of the main transaction components. The amounts presented have been converted into Canadian dollars, our reporting currency. I should point out the definitive purchase agreement is based in euros. As a result, the Canadian dollar proceeds are subject to change depending on currency rates at closing. It's for this reason we are exploring currency hedging options. The net proceeds presented in the waterfall chart are the midpoint of the range we estimate at the transaction close. I should point out that they are subject to closing adjustments on net debt and working capital. As you can see, Bozzetto is valued at an enterprise value of CAD 411 million or EUR 255 million, less its net debt of CAD 117 million and minority interests of CAD 16.5 million and transaction costs of just under CAD 10 million.
The sale of Bozzetto will generate net proceeds in the range of CAD 265 million-CAD 271 million. If you recall, we acquired Bozzetto on an enterprise value of EUR 227 million, and we are selling it based on the SPA, the closing conditions of an enterprise value of EUR 250 million. Over to slide eight. Looking ahead, we anticipate the transaction to close within the next three months, as Rhys said earlier, subject to customary closing conditions, including regulatory approvals. Within 30 days following the transaction close, we will be making an offer to purchase our senior notes. The purchase offer is a requirement of our indenture agreement as triggered by the Bozzetto sale. The offer to note holders will be made at par value of the notes plus any accrued interest up until closing. At December 31st, we had CAD 142.6 million of outstanding senior notes.
Holders will retain the option to hold the notes until the maturity in January 2030. Following the transaction close, we will also begin to deploy our net proceeds towards acquiring controlling interests in operating companies. We have identified a number of target companies, but will not share any further details at this time. What I can say is the companies we will be targeting must provide an opportunity to acquire the controlling interests, generate strong operating cash flows, have solid balance sheets, and be undervalued relative to their peers. Moving on to slide nine. Another important consideration when looking at the benefits of this transaction relates to the financial impact of the early redemption of the senior notes. These notes are bearing a high interest rate of 9.75% and consume CAD 13.9 million of cash annually.
The early redemption will result in cumulative cash savings to maturity in 2030 of approximately $51 million. It's worth remembering that we generated a gain of $53.8 million on an annual cash savings of more than $5 million when we completed our Substantial Issuer Bid last year, where we exchanged our preferred shares at a discount to their face value on the senior notes. That concludes my remarks. I would now like to turn it back, the call back to Rhys for closing comments.
Thanks, Steve. As you have heard, the sale of Bozzetto marks a very important development in our goal of enhancing shareholder value in Aimia and turning Aimia into that permanent capital vehicle that we have spoken about previously. We're excited about the path ahead. There's lots of opportunities around, and this allows us to execute on that strategy of looking for more undervalued companies and deploying the capital in an accretive way. It will take some time for us to get there. We have a number of different ideas that are coming across at the moment. We will be in touch with shareholders and communicate clearly when we have anything to update the market on. But I think the point we want to make about this transaction is that Aimia now has an extensive amount of cash at the centre. It has very little debt once this transaction has concluded.
It's got over CAD 1 billion of tax losses carried forward, and we have strong alignment between the board and shareholders, and we have the opportunity to execute on a number of opportunities which are before us. We will report on the progress to you. With that, we will hand over to Joe for questions.
Operator, if you can provide polling instructions. We do have a number of individuals on the line. We'll go through those first, Rhys, and then I've got a number of inbound emails that as well we'll go through. So operator, please.
Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Brian Morrison with TD Cowen. Your line is now open.
Thanks very much. Good morning. Just start out with a couple of housekeeping questions, Steve. So I just want to understand the transaction valuation. Is it EUR 411 million EV and about EUR 60 million of trailing EBITDA? So it'd be a little under 7x?
Yeah, Brian. You need to look at depending on whether we're referring to trailing or where we're going to come out in 2025 with reported on Bozzetto. But there's a couple of items you need to take into consideration counting the multiple. One is on the minority interest we had with the Honduras business. That's about CAD 2.5 million of the EBITDA that we're reporting on an annual basis. And then there's also the EBITDA that we report is on an IFRS basis, and there's about CAD 4 million and change of lease expense that's below the EBITDA line. But yeah, you're close. We're in the 6.5-7 range depending on whether you're looking at trailing or 2025 EBITDA numbers.
Okay. Then the second housekeeping item I have for you is the cash balance pro forma at the Holdco. So I just want to make sure I have it correct. You have CAD 106 million that you disclosed at the end of Q3, less the CAD 47 million at Bozzetto. You get net proceeds of CAD 268 million. You repay notes, hopefully, at about CAD 140 million. Pro forma is approximately CAD 185 million of net cash. And I understand it would include some Cortland cash, but is that the correct numbers?
Yeah. Sorry, Brian. I'll jump in there. I think that's in the ballpark, yeah.
Okay. And Rhys, while I have you then, just what does this imply for the potential timing or sale of a transaction with Cortland to the extent that you might be able to comment on that?
That's a very good question. So I think since I've been involved in Aimia as the Executive Chairman, I've got to know Cortland Tufropes a lot better from the inside, as you would imagine. And I can tell you I'm quite optimistic about that business, and not only in the short term, so for 2026, but I'm pretty optimistic about it into the long term and what we can do with it. I think there's a lot of ideas that could create extensive value. We'll report more about that probably at the time of our results. But I don't think there's any rush for us to sell it. Now, clearly, if we do receive interest and as I said before, I think there has been interest in all our assets.
But if anything had to come across that would generate a value that I would say is useful for unlocking value across the group, I think we would look at it. But I think in the long term, we can actually do something pretty positive with Cortland, and I'm feeling a lot more comfortable with that asset now. But we'll report on that at our results.
Okay. Then the last question I have for me, Rhys, is maybe just with respect now that you have substantial cash resources on your balance sheet, maybe just an update with respect to the investment opportunities that you're pursuing from a geographic standpoint and/or a segment perspective. The markets have had a heck of a run here, and you're trying to find undervalued assets. Maybe you could just give us some color as to what you're looking at?
Yeah, that's a good question. There's lots of value in the U.K. Let's just be clear. There's value in companies that are very basic businesses that are not impacted by technology disruption, that have lots of cash on the balance sheet, and good management teams. Where those are, there seems to be a lot in the U.K. We have come across one or two things that are in Canada that look attractive. But I think when I look at the U.S. markets, I struggle to find the same kind of attraction to those businesses. They all seem to be carrying too much debt, and the valuations, as you say, are pretty high. But we are finding things in the U.K. and potentially Canada.
Then the other point is what we see is that in public markets, there are companies that might be listed in a certain market but have exposure to other markets that are very attractive. So we want to take advantage of those mispricings as well. But really, I underline the point. What we want is to buy companies that are going to enhance the cash that we have at the centre. So you talk about how much cash we have, and I think your number is in the ballpark. What we want to do is make acquisitions and actually drive up that cash balance. And as we do that, it will put us in a very strong position to be able to buy things that will utilize the tax losses that we carry at Aimia. So that's kind of the strategy.
It's going to take a little while to get there, but I've got no doubt we will get there. It'll probably take 18 months, two years before we can really be executing on that. And that's what makes the notes so interesting. We can deploy this cash immediately into a tender offer for the notes and save ourselves 9.75% a year. So I'm not quite sure why the note holders will sell, but they will. And I think that's going to be a very good use of our cash right off the bat.
For sure. And just to be clear, though, potential opportunities in the U.K., can you allocate your capital losses with those investments or no?
Not yet. But remember, you've got to think of it in stages. So any acquisitions that we look at will enhance the cash at the center of Aimia. So that'll build up our cash balance, and then we'll be able to utilize the tax losses in Canada and the U.S.
Understood. Thank you, guys.
Brian, on that point, in our Q3 or Q2, I should say, no, Q3 presentation, we walk through our tax loss carry forwards. I'll resend on the presentation and the full breakdown to give you an indication of the maturity dates and the amounts that we have outstanding. That'll give you some comfort of where we're going with the use of those tax loss carry forwards.
Thank you, Joe.
Rhys, we have a couple of questions that have come in. Rhys, if you wouldn't mind, first off, if you can provide some context, what happens next with Cortland? Does it stay within your group of holdings?
Yeah. I think I spoke to that with Brian. But to go through that again, I like Cortland. I think there's a lot of opportunity for us to grow that business. If the opportunity does present itself to monetize it, we will look at it as we have in the past. But I'm feeling a lot more optimistic about that, having looked at it from the inside than I was before, looking at it from the outside. So for now, we're happy with it. We see the potential to grow it. But we don't exclude the chance that we might monetize it at some point in the future.
Related to that, what happens to Aimia's investment in Clear Media?
Sorry, Joe. I didn't hear you there.
What happens to Aimia's investment in Clear Media?
Yes. I think we'll update the market on that when we release results. You'll see the performance of that. I think we'll elaborate on that a little bit more. But there's no plans right now to exit that asset.
Okay. Is there any consideration to try and extend the maturity of your notes so that you don't have to deploy all your capital towards a redemption of them?
At 9.75% that we're paying while we're carrying a big cash balance, I don't think we'll I mean, that's up to note holders, obviously. But we're going to make the offer, and we hope that we're able to buy back all the notes.
As you walk through the timeline, you basically indicated you got three months with respect to the closing and then 30 days thereafter for the close of the offering for the notes. Should we assume that any investments will only happen after that, or is that going to be a situation where you can run those activities concurrently?
Yeah. So the way we're going to deploy capital and grow Aimia going forward, there'll be two parts to it. The one part will be ensuring that the opportunities exist. So at the moment, we see opportunities theoretically. But to execute on that will take some time. And so I would imagine, although we can run it concurrently, the reality is it will probably, most likely, be after the notes are settled and we've obviously received the proceeds of Bozzetto.
That's about it, Rhys, in terms of inbounds from emails. Operator, why don't we poll once again for those on our line? Okay. It doesn't look like there's any other questions. For anybody who does have any follow-on, please reach out to me. We'd be happy to schedule some additional time with you. And again, thank you, everyone, for participating on short notice on today's call. Have a good day, everyone.