BackAir Miles owner goes bankrupt, plans sale of program to BMO
The company has been grappling with dwindling liquidity and a loss of customers
PremiumLoyalty Ventures Inc., an operator of consumer rewards programs, filed for bankruptcy with plans to sell Canada’s Air Miles Reward Program to Bank of Montreal.
The company filed for Chapter 11 protection in Houston, Texas, court papers show. The bankruptcy filing allows Loyalty to keep operating while it works on a plan to repay creditors.
The company’s deal to sell Air Miles to BMO is not final, according to a statement. An affiliate of BMO has also agreed to provide $70 million of bankruptcy financing to a Loyalty Ventures affiliate, according to the statement.
Loyalty listed assets of as much as $10 million and liabilities of as much as $1 billion in its bankruptcy petition. An affiliate, LoyaltyOne, also began restructuring proceedings in Canada.
The company has been grappling with dwindling liquidity and a loss of customers. In addition, Loyalty’s revenue has come under pressure because of operational challenges and macroeconomic turbulence. Its total revenue for the third quarter that ended Sept. 30 dropped by 4% year-over-year to $162 million, according to regulatory filings. A measure of earnings collapsed by 30% to $33 million.
Loyalty was spun off from Alliance Data Systems into a publicly listed company in November 2021. Earlier in March, Loyalty said it plans to sell its Dutch-based BrandLoyalty business to Opportunity Partners BV for $6 million.
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This story has been published from a wire agency feed without modifications to the text.
