EDMONTON, Nov. 1, 2013 /CNW/ - Carfinco Financial Group Inc.
("Carfinco") today announced that it has become the "stalking horse
bidder" and proposed plan sponsor for the acquisition of all of the new
equity ownership interests of Western Funding Incorporated ("WFI") and
Global Track GPS LLC ("Global Track," and together with WFI, the
"Companies" and each, a "Company") to be issued pursuant to a plan of
reorganization (the "Plan") subject to confirmation by the United
States Bankruptcy Court for the District of Nevada (the "Court"). On
September 4, 2013, each of the Companies commenced a chapter 11
bankruptcy case in the Court.
The completion of the transactions are subject to, amongst other
conditions, execution of a stock purchase agreement between the parties
(the "Definitive Agreement"), a sale process for competing bids for the
acquisition of the Companies, and an order of the Court confirming the
Plan. Carfinco is also seeking an order of the court approving
reimbursement of certain expenses and a break-up fee in the event that
it is not the successful bidder and an alternative transaction is
The purchase price, to be paid in cash, offered by Carfinco for 100% of
the new common shares of each reorganized Company (the "Acquired
Shares") free and clear of all encumbrances is equal to 70% of the net
finance receivables of the Companies at the time of closing, plus all
costs up to $200,000 necessary to cure monetary defaults of contracts
to be assumed through the bankruptcy process (the "Cure Costs"). The
initial cure costs paid by Carfinco up to and including $100,000 in the
aggregate will decrease the purchase price by the same amount. The
Companies will seek to have the confirmation hearing on or about
December 20, 2013.
Carfinco anticipates the net finance receivables to be in excess of $30
million upon closing and contemplates financing the purchase through a
combination of equity and a new senior debt facility secured by the
assets of the Companies. The new senior debt facility will also provide
the Companies the capital required to grow the finance receivables.
Carfinco intends to provide the equity portion of the purchase price
with equity available subsequent to a bought deal financing in the
spring of 2013.
WFI is a specialized indirect consumer finance company providing
automobile financing to borrowers with limited access to traditional
credit. WFI acquires and services installment loan contracts originated
by a network of approved automobile dealers throughout the United
States. GPS presently has no employees and holds certain intellectual
property rights for its global position system collateral recovery
technology. WFI and GPS are headquartered in Las Vegas, Nevada and were
established in California and Delaware respectively.
About Carfinco Financial Group Inc.
Carfinco, through its Canadian and US subsidiaries (the "Subsidiaries"),
focuses on providing indirect consumer vehicle loans to borrowers
unable to obtain financing through traditional lending sources. A
network of select independent and franchise dealerships offer the
Subsidiaries payment plans to their customers who must, along with the
vehicle, meet the Subsidiaries underwriting guidelines. The shares of
Carfinco trade on The Toronto Stock Exchange under the symbol "CFN".
Caution Regarding Forward-Looking Statements - This news release
contains certain forward-looking statements, including statements
regarding the business and anticipated financial performance of the
company. These statements are subject to a number of risks and
uncertainties. Actual results may differ materially from results
contemplated by the forward-looking statements. When relying on
forward-looking statements to make decisions, investors and others
should carefully consider the foregoing factors and other uncertainties
and should not place undue reliance on such forward-looking statements.
SOURCE: Carfinco Financial Group Inc.
For further information:
Mr. Tracy A. Graf
CEO & Director of Carfinco Financial Group Inc.
Web site: www.carfinco.com
The Howard Group Inc.
Web site: www.howardgroupinc.com