West Face Capital seeks to oust ACE Aviation directors

Three-month trading in ACE Aviation class A sharesAn investor in ACE Aviation Holdings Inc., the parent company of Air Canada, said Wednesday it has requested a shareholders meeting to replace ACE's entire board of directors.

West Face Capital Inc., an activist investment firm, said it's worried about what might happen to the cash in ACE's coffers.

"West Face has recently become concerned about the intentions of ACE management and the current board of directors as to the use of ACE's cash resources and has taken this action to ensure that the board of directors of ACE is sufficiently independent to protect the interests of ACE and its shareholders," the firm said in a statement.

Three-month trading in ACE Aviation class B shares

West Face said it intends to propose at a later date a list of nominees for election to the board of directors at the shareholders meeting.

The request was made on behalf of three of the investment firm's funds. ACE said it will consider the request and respond "in due course."

West Face Capital holds 15 per cent of ACE's class A restricted voting shares, according to Bloomberg.

The holding company, which was formed in 2004 to be the parent of the main airline and its subsidiaries, has since divested most of its assets but retains 75 per cent ownership of Air Canada.

In May, Robert Milton, who is CEO of ACE as well as chairman of its board of directors, said ACE was on track to wind up its operations as a holding company in three to six months.

However, ACE said last month that it wouldn't be rushed into dissolving the holding company.

ACE Aviation's class A shares closed up 23 cents Wednesday to $3.30, while its class B shares gained 24 cents to $3.34 on the TSX.

With files from the Canadian Press