MONCTON, NB, Dec. 30 /CNW Telbec/ - Imvescor Restaurant Group Inc. ("IRG" or the "Company") (TSX: IRG), announced that it has successfully negotiated an early renewal of a $15 million loan with GE Canada Equipment Finance G.P.'s Franchise Finance division ("GE". The Company also announced that it will take a non-cash goodwill and intangible asset impairment charge.
On December 30, 2010, IRG renewed its $15 million term loan with GE due December 2011. The loan was renewed for a three-year term. The Company has modified the covenant ratios for the various loans with GE and as a result, the Company now meets all covenants on its outstanding debt. The renewal enables IRG to reclassify all but the current portion of the loan to long-term debt and this will be reflected in the Company's year-end statements to be issued before the end of January 2011.
"The renewal and reclassification of the $15 million loan restores stability to our balance sheet and enables us to consider other financing options," said William Lane, interim chief executive officer of IRG. "The loan renewal demonstrates that we are confident in our business and that our partners are confident in IRG."
Non Cash Impairment
On an annual basis the Company conducts an impairment test of its goodwill and intangible assets by evaluating whether the carrying amount of the asset exceeds its fair value. As a result of this test, the Company will record a non-cash impairment charge of between $24 million and $28 million, primarily to goodwill. This charge will reduce earnings but has no impact on the cash flow of IRG.
"This impairment charge does not affect our cash position," said Mr. Lane. "We continue to look for new opportunities to strengthen and grow our brands and we are confident that when market conditions in the restaurant industry firm up, our brands will emerge as strong leaders in the family and casual dining segments of the restaurant industry."
Annual General Meeting
The Company also announced today that it will hold its annual general meeting of shareholders on March 16, 2011. The record date, time and location of the meeting will be announced at a later date.
About Imvescor Restaurant Group
Headquartered in Moncton, New Brunswick, IRG owns franchised and corporate stores throughout Canada, under four brands: Pizza Delight® operates primarily in Atlantic Canada, where it dominates the family/mid-scale segment. Mikes® and Scores® restaurants operate primarily in Quebec in the family and casual dining segments and the take-out and delivery segments. Baton Rouge® operates in the Province of Quebec, Ontario, and Alberta in the casual dining segment.
Certain information regarding IRG contained herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The Company cautions that actual performance will be affected by a number of factors, many of which are beyond the Company's control, and that future events and results may vary substantially from what the Company currently foresees. The Company assumes no obligation to update such forward-looking statements, except as required by applicable securities laws. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement.
For further information: For further information:
Cohn & Wolfe
|William R. Lane, CMA
Acting Chief Executive Officer,
Executive Vice-President & Chief Financial Officer
Imvescor Restaurant Group Inc.
For more information about our brands:
Pizza Delight®: http://www.pizzadelight.com
Bâton Rouge®: http://www.batonrougerestaurants.com