Richardson GMP Debt Refinancing GMP Capital Inc. Announces That it Expects to Receive $28 Million in Connection with Richardson GMP Debt Refinancing
Canada NewsWire
TORONTO, Oct. 31, 2017
TORONTO, Oct. 31, 2017 /CNW/ - GMP Capital Inc. (GMP) (TSX: GMP) today announced that Richardson GMP Limited (Richardson GMP) has entered into a four-year $80 million credit facility agreement with a syndicate of chartered banks. Richardson GMP intends to use the initial proceeds from this facility to refinance its existing long-term indebtedness. The remainder of the proceeds will be used to redeem a substantial portion of its Class B Preference Shares, at par, for an aggregate cash redemption amount of $45 million (the Redemption), including all declared and unpaid dividends, and to repay fully its $5 million subordinated loan facility made available by GMP. The Redemption will be allocated equally between GMP and James Richardson & Sons, Limited. It is anticipated that GMP will receive approximately $28 million in cash.
These transactions do not affect the existing equity ownership interests in Richardson GMP held by GMP and James Richardson & Sons, Limited (each owns approximately 32%).
"We are pleased to be receiving such a notable return of capital on our investment in Richardson GMP, which substantially strengthens our net working capital position. This new credit agreement is reflective of the evolution of Richardson GMP's franchise and allows Richardson GMP to access more cost effective and tax efficient external funding thereby increasing its financial flexibility," said Harris Fricker, President and CEO of GMP.
Commenting further, Mr. Fricker said, "This transaction is a positive reflection of the evolution of Richardson GMP and its strong financial performance. Its stable cash flow generation should allow the company to continue returning capital to its shareholders. GMP remains committed to working with our partners at Richardson GMP as they continue to grow the business and solidify their firm's standing as a leading wealth management firm in Canada."
These transactions remain subject to customary approvals, including the approval of the Investment Industry Regulatory Organization of Canada.