EDMONTON, Sept. 30, 2014 /CNW/ - The Cash Store Financial Services Inc. ("Cash Store Financial" or the "Company") announces that it has obtained an order from the Ontario Superior Court of Justice (Commercial List) ("the Court") granting a stay extension under its current Companies' Creditors Arrangement Act ("CCAA") proceedings to November 28, 2014.
The Court also authorized the Company and its subsidiaries to enter into a further amendment to its amended and restated debtor-in-possession ("DIP") financing agreement ("Further Amended DIP Agreement") pursuant to which an additional loan in the aggregate amount of $5 million will be available to the Company. In addition, the Further Amended DIP Agreement permits the Company to use $1.3 million of tax refunds to fund operations, rather than to make an immediate repayment to the DIP lenders. The amounts made available under the Further Amended DIP Facility are required in order to continue going concern operations and attempt to complete a sale of the Company's business pursuant to the Court-approved Sale Process, under which prospective purchasers have had the opportunity to submit a bid for the Company's property.
Discussions and negotiations with potential bidders are ongoing under the Sales Process. The Further Amended DIP Agreement will provide the necessary liquidity throughout the stay extension to continue to negotiate a sale transaction to achieve a value maximizing going concern outcome.
The Court also today approved the Ninth Report of the Monitor, FTI Consulting Canada Inc., dated August 6, 2014. A copy of this report, as well as other orders of the Court, including details on the sales process, as well as other details regarding the Company's CCAA proceedings is available on the Monitor's website at http://cfcanada.fticonsulting.com/cashstorefinancial.
Cash Store Financial remains open for business and will continue to provide updates on its restructuring and the Cash Store Sale Process as matters advance.
About Cash Store Financial
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 private-label debit cards.
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 Debtor-in-Possession ("DIP") financing agreement 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 http://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.
For further information: William Aziz, Chief Restructuring Officer, [email protected]; Media: Joel Shaffer, Longview Communications, 416-649-8006