EDMONTON, May 21, 2014 /CNW/ - The Cash Store Financial Services Inc.
("Cash Store Financial" or the "Company") (TSX: CSF) announced today
that the Ontario Superior Court of Justice (Commercial List) ("Court")
has granted an Order extending the stay of proceedings in Cash Store
Financial's proceedings under the Companies' Creditors Arrangement Act ("CCAA") to June 17, 2014.
The Court also authorized the Company and its subsidiaries to enter into
an amended and restated debtor-in-possession ("DIP") financing
agreement ("Amended DIP Agreement") pursuant to which an aggregate
amount of up to $14.5 million will be available to the Company to
permit it to continue operations during the CCAA proceedings. The
Amended DIP Agreement contains an extension option that will permit
Cash Store Financial, with the consent of the DIP Lenders, to increase
the amount of DIP financing available under the Amended DIP Agreement
to a total amount of $16.5 million, subject to the terms and conditions
of the agreement. In accordance with the terms of the Amended DIP
Agreement, Cash Store Financial has repaid $8.5 million to the DIP
Lenders from the proceeds of certain tax refunds received by the
Company. This amount cannot be re-borrowed. The total amount of new
funding available under the Amended DIP Agreement is $6 million plus an
additional $2 million if the extension option is exercised in
accordance with its terms.
Continued protection under the CCAA and the new financing available
under the Amended DIP Agreement will provide Cash Store Financial with
additional time and stability to continue its restructuring under the
CCAA, with the assistance of the Court-appointed Chief Restructuring
Officer of the Company ("CRO"), the Court-appointed Monitor and the
Court. Cash Store Financial is committed to completing its
restructuring process quickly and efficiently. The Company remains open
for business and its branches continue to operate.
Further details concerning the Company's restructuring can be obtained
from the CRO, William Aziz, at baziz@bluetreeadvisors.com. Further details regarding the CCAA proceedings are available on the
Monitor's website at http://cfcanada.fticonsulting.com/cashstorefinancial/.
About Cash Store Financial
Cash Store Financial operates 506 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 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 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 certain forward-looking statements about the
objectives, strategies, financial conditions, results of operations and
businesses of Cash Store Financial. Statements that are not historical
facts are forward-looking and are subject to important risks,
uncertainties and assumptions. These statements are based on our
current expectations about our business, and upon various estimates and
assumptions. The results or events predicted in these forward-looking
statements may differ materially from actual results or events if known
or unknown risks, trends or uncertainties affect our business, or if
our estimates or assumptions turn out to be inaccurate. As a result,
there is no assurance that the circumstances described in any
forward-looking statement will materialize. Significant and reasonably
foreseeable factors that could cause our results to differ materially
from our current expectations, include, but are not limited to, any
decision of the Ontario Superior Court of Justice in the CCAA
proceedings that is adverse to Cash Store Financial, the inability of
Cash Store Financial to fulfill the conditions to funding under any DIP
financing agreement to be entered into by Cash Store Financial, and
other factors that could affect Cash Store Financial's ability to
continue its operations during the CCAA proceeding, including the
factors that are discussed in the section entitled "Risk Factors"
contained in our Annual Information Form for the year ended September
30, 2013 dated December 11, 2013 filed by The Cash Store Financial with
the Canadian securities commissions (available on SEDAR at www.sedar.com ), as updated in our most recent Management's Discussion and Analysis
for the three months ended December 31, 2013. Unless required by law,
we disclaim any intention or obligation to update any forward-looking
statement even if new information becomes available, as a result of
future events or for any other reason.
SOURCE The Cash Store Financial Services Inc.
