CALGARY, May 31, 2011 /CNW/ - Rocky Mountain Dealerships Inc. ("Rocky"
or the "Company") (TSX: RME) announced today that it has entered into a
Credit Agreement (the "Agreement") with a syndicated group of lenders
led by HSBC Bank Canada, the Bank of Nova Scotia, Rabobank, Nederland
Canadian Branch, Canadian Imperial Bank of Commerce and De Lage Landen
Financial Services Canada Inc. (collectively with HSBC Bank Canada, the
Under the Agreement, the Lenders have granted Rocky an aggregate $160
million financing commitment consisting of:
a $30 million operating facility, which may be used to advance up to 50%
eligible inventory, plus 75% of eligible accounts;
a $30 million acquisition facility, which may be used to finance future
a $100 million flooring facility, which may be used to finance up to 75%
of the value of eligible equipment inventory.
"We appreciate the support of HSBC Bank Canada, and we welcome the
support of our new financial partners. These new facilities will
increase Rocky's aggregate available credit by $78 million and should
represent an improvement to our cost of capital. In addition, the
Agreement provides us with the financial flexibility to pursue our long
term growth initiatives and demonstrates investor confidence in our
strategy and our financial position," said Matt Campbell, Rocky's
Chairman & CEO. "I am very pleased, that when the time is right to
recommence our acquisition initiatives, we will have the financial
flexibility to do so," added Mr. Campbell.
The Company incurred approximately $0.9 million in after-tax charges in
the second quarter of 2011 related to closing the Agreement.
On a separate and unrelated matter, the Company has now finalized the
severance arrangements pursuant to Mr. Taschuk's departure from Rocky,
as previously announced on May 10, 2011. In accordance with Mr.
Taschuk's employment and non-compete agreements, and in recognition of
his 11 year contribution to the Company, Rocky will record a one-time,
non-recurring charge to earnings of approximately $1.2 million after
tax in the second quarter of this year.
Rocky is one of Canada's largest agriculture and construction equipment
dealerships, with branches throughout Alberta, Saskatchewan, and
Manitoba. Rocky sells, rents, and leases new and used agriculture and
construction equipment and offers product support and finance.
Additional information on Rocky is available at www.rockymtn.com and on SEDAR at www.sedar.com.
Caution Regarding Forward-Looking Information and Statements
Certain statements contained in this news release constitute
forward-looking statements or information. These statements relate to
future events or future performance of Rocky. All statements other than
statements of historical fact are forward-looking statements. The use
of any of the words, including, but not limited to "anticipate", "plan"
"continue", "estimate", "expect", "may", "will", "project", "predict",
"potential", "should", "believe" and similar expressions are intended
to identify forward-looking statements.
In particular such forward-looking statements in this news release
include the statements that: "These new facilities will increase
Rocky's aggregate available credit by $78 million and should represent
an improvement to our cost of capital." The foregoing statement is
based on the assumption that the rate of interest charged on the
syndicated flooring facility will continue to be favorable relative to
certain of the Company's existing flooring facilities.
As such, many factors could cause the performance or achievements of the
Company to be materially different from any future results, performance
or achievements that may be expressed or implied by such
SOURCE Rocky Mountain Dealerships Inc.
For further information:
Rocky Mountain Dealerships Inc.
Matt Campbell, Chief Executive Officer; or
Garrett Ganden, Chief Financial Officer and Chief Operating Officer
828 - 46th Avenue S.E.
Calgary, Alberta T2G 2A6
Telephone: (403) 243-8600, Fax (403) 243-2264