The Brick Group announces completion of $25 million letter of credit financing



    
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    EDMONTON, Aug. 24 /CNW/ - The Brick Group Income Fund (TSX:BRK.UN) (the
"Brick Group") today announced the closing of its recently announced financing
pursuant to which Fairfax Financial Holdings Limited ("Fairfax") has issued an
irrevocable letter of credit in the aggregate principal amount of C$25 million
(the "Fairfax LC") to GE Capital ("GE Capital"), as agent on behalf of itself
and BMO Bank of Montreal ("BMO") under the May 28, 2009 Credit Agreement (the
"GE Capital Credit Agreement").
    The purpose of the Fairfax LC is to backstop additional letters of credit
to be issued under the GE Capital Credit Agreement to some of the Brick
Group's inventory suppliers (the "Supplier LCs"); provided that such inventory
suppliers agree to extend additional new credit to the Brick Group of not less
than 150% of the amount of the Supplier LCs. The GE Capital Credit Agreement
will continue to provide for maximum borrowings of up to $130 million, and
will continue to vary from time to time based on the level of the Brick's
inventory and accounts receivable (as at August 16, 2009, the Fund was able to
borrow up to $76.9 million under this facility). In connection with Fairfax
providing the Fairfax LC, the GE Capital Credit Agreement has been amended to
provide that Supplier LCs are margined against 100% of the $25 million Fairfax
LC, plus existing availability, if any, based on the level of the Brick's
inventory and accounts receivable.
    "This new financing, combined with the current credit available under the
GE Capital Credit Agreement, should provide the Brick Group with ample
liquidity to manage our business," said Bill Gregson, President and CEO.
    The Fairfax LC has an initial term of six months which can be extended at
the option of the Brick, subject to certain conditions, for up to an
additional six months. Interest at a rate of 15% per annum is only payable on
amounts drawn under the Fairfax LC. In connection with the issue of the
Fairfax LC, the Brick Group has paid a fee to Fairfax in the amount of
$300,000 and has issued to Fairfax 5,317,100 warrants (the "LC Warrants").
Each full LC Warrant will entitle the holder to purchase one Class A unit of
the Brick Group at a price of $0.82 per Class A unit until August 24, 2014.
The exercise price of the LC Warrants is based on the volume weighted average
of the trading price of the Class A units of the Brick Group on the Toronto
Stock Exchange for the five trading days immediately prior to August 7, 2009,
which is the date the Brick Group entered into an agreement in principle with
Fairfax with respect to the Fairfax LC. In the event the Fairfax LC is
extended, the Brick will pay an extension fee to Fairfax in the amount of
$1,250,000.
    The Supplier LCs will be issued by BMO under the GE Capital Credit
Agreement. Effective August 25, 2009, BMO will also begin providing cash
management services to the Brick Group.
    The Brick Group has also granted Fairfax a pre-emptive right to
participate in future non-public financings of the Brick Group that are priced
at less than 95% of the market value of the Brick Group's Class A units at the
time of the financing. The pre-emptive right will allow Fairfax to maintain
its proportionate ownership level, on a fully diluted basis, as was held by
Fairfax immediately prior to the financing and will apply for a period ending
on the earlier of: (i) August 24, 2014; and (ii) the date that Fairfax has
exercised 4,000,000 or more of the LC Warrants. Following the issuance of the
LC Warrants, Fairfax and its affiliates owned 8,380,200 Class A units of the
Brick Group and an aggregate of 50,317,100 warrants of the Brick Group
representing an approximate 32% ownership interest in the Brick Group
calculated on a fully diluted basis (assuming the exercise of all outstanding
warrants).

    About the Brick Group

    The Brick Group, together with its subsidiaries, is one of Canada's
largest volume retailers of household furniture, mattresses, appliances and
home electronics, operating under five banners: The Brick, United Furniture
Warehouse, The Brick Superstore, The Brick Mattress Store, and Urban Brick. In
addition, through its corporate sales division, the Brick Group services the
subdivision, condominium, and high-rise builder market. The Brick Group's
retail operations are located in British Columbia, Alberta, Saskatchewan,
Manitoba, Ontario, Quebec, Prince Edward Island, Nova Scotia and the New
Brunswick, and the Yukon Territory.





For further information:

For further information: Bill Gregson, President and CEO, The Brick
Group, (780) 930-6300, investor@thebrickgroup.ca; Nick Bobrow, CA, Chief
Financial Officer, The Brick Group, (780) 930-6300, investor@thebrickgroup.ca


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