Last week the Globe and Mail reported that a “debt restructuring” at the largest movie theatre chain in Europe would wipe out a huge investment made by the Alberta Investment Management Corp., which manages Alberta’s public sector investments.
AIMCo, as the Alberta pension fund management company is better known, and the Ontario Municipal Employees Retirement System, the Globe reported, could together see shares in at Vue International Bidco PLC worth $1.4 billion Cdn “cancelled.”
It was not clear from the Globe’s story whether the “debt restructuring” was in fact a bankruptcy, the circumstances in which business reporters would normally use that term.
Nor was it clear whether the shares were cancelled with the two pension management companies’ permission, which would be the normal procedure in such a situation, and thus whether AIMCo and OMERS could expect to receive some compensation.
If the investment was truly to be “wiped out,” as the Globe stated, it would seem they would not, which would be highly unorthodox.
If you ask this former Globe Report on Business reporter, the story created more questions than it answered, but it did make clear that something had gone seriously wrong with a major investment by AIMCo and OMERS, both of which are on the hook for significant losses, and that answers are urgently needed.
This is especially true in the case of AIMCo, which is intended to be the vessel that would carry the Alberta provincial pension plan that Jason Kenney (and Travis Toews, and Danielle Smith, and Brian Jean, and God only knows how many other UCP leadership candidates) dreams of grabbing Albertans’ Canada Pension Plan savings to create.
Accordingly, on Monday, I sent to emails to AIMCo’s media relations staff to ask the following questions:
1) Does the financial restructuring at Vue International Bidco PLC mean that Vue has filed for bankruptcy?
2) The Globe story said Vue was “wiping out” the investments made by AIMCo and OMERS. To me, this would imply that there will be zero compensation for AIMCo. Is this accurate?
3) Did AIMCo (and OMERS) agree to the share cancellation, or was it allowed to proceed without the agreement of shareholders?
4) If AIMCo agreed to the share cancellation, what were the reasons for the agreement?
5) Will there be any financial compensation to AIMCo for the share cancellation?
6) What was AIMCo’s share of that investment?
7) What is AIMCo’s loss expected to be?
The response I have received to these questions is … crickets.
That is to say there was not even an acknowledgement that my email was received.
I don’t feel singled out by this, though. After all, AIMCo didn’t get back to the Globe’s reporter either, at least before he wrote his story. And an AIMCo spokesperson refused to comment to a CBC reporter who followed the story yesterday. As a result, the CBC report cast no light on the dark spots in the Globe’s story.
If AIMCo’s reasoning for not responding to reporters’ questions is the hope that the media will just go away, that doesn’t seem much smarter than some of the corporation’s recent investment decisions.
Indeed, there will likely be more media interest now, seeing as the Opposition NDP’s finance critic, Lethbridge-West MLA Shannon Phillips, yesterday published a statement about whatever is happening at AIMCo with the Vue investment.
“The failure of the Vue investment is another significant loss to Albertans, likely in the neighbourhood of $1 billion,” Ms. Phillips said. “It follows the loss of $2 billion of Albertans’ money due to AIMCo’s failed volatility-based trading strategy.”
“AIMCo has demonstrated clear problems with its risk management approach,” she continued. “It also does not publicly disclose its investments, unlike similar provincial investment funds” – such as the British Columbia Investment Management Corp.
“These losses will affect the pension funds that the UCP forced into management by AIMCo, including the Alberta Teachers Retirement Fund, along with all Albertans through the Heritage Fund,” Ms. Phillips noted.
“This episode proves yet again how dangerous the UCP’s scheme to move Albertans’ CPP contributions into AIMCo management really is, she said, concluding, “the UCP must abandon this reckless gamble with Albertans’ pensions.”
You can say that again!