RED DEER, AB, April 30 /CNW/ - RIFCO INC. (TSX.V: RFC) is pleased to
announce that it has negotiated a $2.0M letter of credit (LOC) with BMO Bank
of Montreal. The LOC forms part of RIFCO's existing senior debt facility.
Delivery of the LOC to the securitization trust administrator has resulted in
a $2.0M cash release from the retained interest cash reserve. The released
cash has been used to pay down RIFCO's senior debt borrowing. RIFCO initiated
this action in order to achieve decreased interest expenses on an ongoing
basis. This change did not have a negative effect on RIFCO's financial
leverage or flexibility.
RIFCO continues to successfully pursue its strategic plan to strengthen
the company's balance sheet to position the company and pursue its robust
growth objectives with confidence.
As previously disclosed, on October 20th and November 30th, 2006 the
company closed private placements which added a total of $1.5M in new equity.
On Dec. 12, 2006, the company completed a subordinated debt renegotiation
program that reduced the annual interest cost to 10.7% from 12.7% on $2.15M in
subordinated debt. This debt was previously callable by the debt holders with
90 days notice and now has locked-in terms of 12-42 months. This "terming out"
of these obligations effectively moved the majority of the subordinated debt
out of current liabilities. On January 22, 2007, the Company announced a $3.0M
increase in its senior debt facility to $7.5M.
The company continues to pursue low cost funding facilities with maximum
flexibility for RIFCO's growth. RIFCO's funding strategy remains a combination
of senior debt, subordinated debt and loan securitization.
About RIFCO Inc.
RIFCO Inc. operates through its wholly owned subsidiary Repair Industry
Finance Corporation. RIFCO is a specialty consumer finance corporation. RIFCO
provides Automotive & Commercial Repair Financing and Vehicle Purchase
Financing to mid-market motorists.
The common shares of RIFCO INC. are traded on the TSX Venture Exchange
under the symbol "RFC". RIFCO Inc. has 19.23 million shares outstanding.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
For further information:
For further information: RIFCO INC., Lance A. Kadatz, Vice President and
Chief Financial Officer, Telephone: (403) 314-1214 Ext 111, Fax: (403)
314-1132, Email: email@example.com, Website: www.rifco.net