EDMONTON, March 28, 2014 /CNW/ - The Cash Store Financial Inc. ("Cash
Store Financial" or the "Company") (TSX: CSF) (NYSE: CSFS) today
announced that the Ontario Registrar of the Ministry of Consumer
Services ("Registrar") has issued a final order to refuse a lender's
license under the Payday Loans Act, 2008 ("Payday Loans Act") to the Company's subsidiaries, The Cash Store Inc.
and Instaloans Inc. The Company is currently not permitted to sell any
payday loan products in Ontario and will not be eligible to re-apply
for a lender's license for 12 months from the date of issuance of the
final order. If the Company chooses to re-apply for a license after
such time, the Company will be required to provide new or additional
evidence for the Registrar to consider or demonstrate that material
circumstances have changed.
The Company also announced that it has appealed the previously announced
order of the Ontario Superior Court of Justice dated February 12, 2014
pursuant to which the Company's basic line of credit product was
declared to be a payday loan and the Company was prohibited from acting
as a loan broker in respect of its basic line of credit product without
a broker's license under the Payday Loans Act. There is no certainty
that the appeal will be successful and it is possible that the Company
will be required to permanently close its Ontario operations.
The Company also announced that, as part of its ongoing strategic
review, the Company and the advisors to the Special Committee of the
Board of Directors have engaged in discussions with certain of the
Company's creditors and other stakeholders to address near term
liquidity issues that have arisen, including as a result of the
suspension of the Company's right to make loans in Ontario. The Company
has been notified of the formation of an ad hoc committee of holders of
the Company's 11.5% senior secured notes through its legal and
financial advisors and, accordingly, the ad hoc committee is one of the
creditor groups involved in discussions with the Company regarding how
to address its near term liquidity issues.
There is no certainty that the Company's near term liquidity issues will
be resolved and, if resolved, on terms that are favourable to the
Company.
About Cash Store Financial
Cash Store Financial is the only lender and broker of short-term
advances and provider of other financial services in Canada that is
listed on the Toronto Stock Exchange (TSX: CSF). Cash Store Financial
operates 510 branches across Canada under the banners "Cash Store
Financial" and "Instaloans". Cash Store Financial also operates 27
branches in the United Kingdom.
Cash Store Financial and Instaloans primarily act as lenders and brokers
to facilitate short-term advances and provide other financial services
to income-earning consumers who may not be able to obtain them from
traditional banks. Cash Store Financial also provides a private-label
debit card (the "Freedom" card) and a prepaid credit card (the "Freedom
MasterCard") as well as other financial services, including bank
accounts.
Cash Store Financial employs approximately 1,900 associates and is
headquartered in Edmonton, Alberta.
Cash Store Financial is a Canadian corporation that is not affiliated
with Cottonwood Financial Ltd. or the outlets Cottonwood Financial
Ltd. operates in the United States under the name "Cash Store". Cash
Store Financial does not do business under the name "Cash Store" in the
United States and does not own or provide any consumer lending services
in the United States.
Forward looking statements
This news release contains "forward-looking information" within the
meaning of applicable Canadian securities legislation and
"forward-looking statements" within the meaning of United States
federal securities legislation, which we refer to herein, collectively,
as "forward-looking information". Generally, forward-looking
information can be identified by the use of forward-looking terminology
such as "estimates", "plans", "expects", or "does not expect", "is
expected", "budget", "scheduled", "forecasts", "intends",
"anticipates", or "does not anticipate", or "believes" or variations of
such words and phrases or state that certain actions, events or results
"may", "could", "would", "might", or "will be taken", "occur", or "be
achieved". In particular, this news release contains forward-looking
information with respect to the final order of the Registrar, the
ability of Cash Store Financial to obtain licenses under the Payday
Loans Act in the future, the appeal of the February 12, 2014 decision
of the Ontario Superior Court of Justice, the discussions with Cash
Store Financial's creditors and other stakeholders, Cash Store
Financial's liquidity position and the consequences of suspension of
carrying on business in Ontario. Forward-looking information is
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance or
achievements of Cash Store Financial, to be materially different from
those expressed or implied by such forward-looking information,
including, but not limited to, changes in economic and political
conditions, legislative or regulatory developments, technological
developments, third-party arrangements, competition, litigation, risks
associated with but not limited to, market conditions, and other
factors described under the heading "Risk Factors" in our Annual MD&A,
which is on file with Canadian provincial securities regulatory
authorities, and in our Annual Report on Form 20-F filed with the U.S.
Securities and Exchange Commission. All material assumptions used in
providing forward-looking information are based on management's
knowledge of current business conditions and expectations of future
business conditions and trends, including our knowledge of the current
credit, interest rate and liquidity conditions affecting us and the
general economic conditions in Canada, the United Kingdom and
elsewhere. Although we believe the assumptions used to make such
statements are reasonable at this time and have attempted to identify
in our continuous disclosure documents important factors that could
cause actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. Certain
material factors or assumptions are applied by us in making
forward-looking information, including without limitation, factors and
assumptions regarding our continued ability to fund our payday loan
business, rates of customer defaults, relationships with, and payments
to, third party lenders, creditors and other stakeholders, demand for
our products, our operating cost structure, current consumer protection
regulations and other laws, Cash Store Financial's liquidity position
and the consequences of suspension of carrying on business in Ontario.
There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ materially
from those anticipated in such information. Accordingly, readers should
not place undue reliance on forward-looking information. We do not
undertake and expressly disclaim any obligation to update any
forward-looking information, except in accordance with applicable
securities laws.
SOURCE The Cash Store Financial Services Inc.