Loyalty Ventures Inc., an operator of consumer rewards programs, filed for bankruptcy with plans to sell the Canadian Air Miles Rewards program to the Bank of Montreal.
The company filed for Chapter 11 protection in Houston, Texas, court papers show. The bankruptcy filing allows Loyalty to remain operational while working on a plan to repay creditors.
According to a statement, the company’s deal to sell air miles to BMO is not final. According to the statement, an affiliate of BMO has also agreed to provide $70 million in bankruptcy financing to the Loyalty Ventures affiliate.
Loyalty Listed Property Up to $10 million in bankruptcy petitions and liabilities of up to $1 billion. An affiliate, LoyaltyOne, also began restructuring proceedings in Canada.
The company is grappling with dwindling liquidity and lack of customers. In addition, loyalty revenues have come under pressure due to operational challenges and macroeconomic disturbance. Its total revenue declined 4% year-over-year to $162 million for the third quarter ended Sept. 30, according to a regulatory filing. A measure of earnings fell 30% to $33 million.
Loyalty was converted from Alliance Data Systems to a publicly listed company in November 2021. Earlier in March, Loyalty said it plans to sell its Dutch-based brand loyalty business to Opportunity Partners BV for $6 million.
The text of this story is published from a wire agency feed without any modification.
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