EDMONTON, March 31 /CNW/ - Rentcash Inc. ("Rentcash"; TSX - RCS)
announced today the completion of its previously announced "spin-out" of
Insta-Rent Inc. ("Insta-Rent").
Rentcash is also pleased to announce that Rentcash has effected a name
change to "The Cash Store Financial Services Inc." ("Cash Store Financial")
and that effective April 7, 2008, Rentcash's shares will trade on the Toronto
Stock Exchange ("TSX") under its new name under the trading symbol ("CSF").
Mr. Gordon Reykdal, Chairman and CEO of Rentcash commented, "The name
change to The Cash Store Financial Services Inc., is a clear definition of the
company's primary focus of payday advances, and signals the completion of
separating the payday advance and rental businesses."
Mr. Reykdal added, "We are extremely excited to complete the spin-out of
Insta-Rent and to bring clarity to the operating models of both the payday
advance and rental businesses. I am confident that this arrangement will
contribute positively to shareholder value."
Insta-Rent also announced today that Bill Johnson has been appointed
President and Chief Executive Officer of Insta-Rent. Mr. Johnson has been the
President and Chief Operating Officer of the rental business since April 2006.
The spin-out of Insta-Rent was affected in accordance with the Plan of
Arrangement (the "Arrangement") which was approved by the Rentcash
shareholders on November 28, 2007. Shareholders will now hold one Cash Store
Financial common share and one Insta-Rent common share for each Rentcash
common share previously held.
Certificates representing Insta-Rent common shares will be issued to
shareholders of record of Rentcash common shares on the distribution record
date of April 9, 2008. Separate trading of the Insta-Rent common shares is
expected to commence on the TSX Venture Exchange on April 7, 2008 under the
symbol "IRR". Holders of Rentcash common shares who sell them on the TSX on or
before April 6, 2008 will also be selling their entitlement to receive
Insta-Rent common shares in the spin-off. Rentcash shareholders are encouraged
to consult their brokers.
As a result of the Arrangement, an aggregate of approximately 19,684,373
Cash Store Financial common shares and an equal number of Insta-Rent common
shares are issued and outstanding.
For further information on the Arrangement, please refer to the
Management Information Circular and Proxy Statement of Rentcash dated
October 30, 2007 and filed on SEDAR on November 6, 2007 (the "Circular").
Tax Consequences of the Arrangement
The Arrangement may have tax consequences for shareholders of Rentcash.
Shareholders are urged to review the entire section of the Circular entitled
"Certain Income Tax Considerations". Rentcash has received an advance income
tax ruling and opinion from the Canada Revenue Agency that the Arrangement
will qualify as a tax-deferred "butterfly" reorganization pursuant to
paragraph 55(3)(b) of the Income Tax Act (Canada) provided certain conditions
are satisfied and therefore the Arrangement should not result in any material
current Canadian federal income tax liability for Cash Store Financial,
Insta-Rent or their respective affiliates or, in general, for shareholders who
held their Rentcash common shares as capital property.
Estimated Tax Basis of Shares on Insta-Rent Spin-out
As undertaken in the Circular, Cash Store Financial has estimated the
adjusted cost base allocation between the Cash Store Financial common shares
and the Insta-Rent common shares as a result of the spin-out of Insta-Rent.
For tax purposes, shareholders are generally required to allocate the
adjusted cost base of their Rentcash common shares held immediately before the
spin-out between their Cash Store Financial and Insta-Rent common shares held
immediately after the spin-out in proportion to their respective fair market
values. Cash Store Financial has determined that it is reasonable for
shareholders to allocate 8.9 percent of the cost of their pre spin-out
Rentcash common shares to their Insta-Rent common shares and 91.1 percent to
their post spin-out Cash Store Financial common shares.
Cash Store Financial's estimated allocation is not binding on the tax
authorities or on any shareholder and shareholders should consult their own
About The Cash Store Financial Services Inc. (formerly Rentcash Inc.)
Cash Store Financial operates more than 370 branches across Canada under
two banners: The Cash Store and Instaloans.
The Cash Store and Instaloans act as brokers to facilitate payday advance
services to income-earning consumers who may not be able to obtain them from
traditional banks. Cash Store Financial also provides two private-label debit
cards, The Cash Store Cash Card(TM) and InstaWorld Debit Card, and other
Cash Store Financial employs more than 1,500 associates and is
headquartered in Edmonton, Alberta.
About Insta-Rent Inc.
Insta-Rent operates 60 stores across Canada under the Insta-Rent banner.
Insta-Rent rents brand-name furniture, appliances, electronics and
computers, with or without an option to purchase. Insta-rent operates
primarily in The Brick and United Furniture Warehouse locations, which are
part of The Brick Group, one of Canada's largest volume retailers of household
furniture, mattresses, appliances and home electronics.
Insta-Rent employs more than 250 associates and is headquartered in
For further information:
For further information: Gordon J. Reykdal, Chairman and Chief Executive
Officer, Cash Store Financial, (780) 408-5118 or Bill Johnson, President and
Chief Executive Officer, Insta-Rent Inc., (780) 732-5695 or Michael J.L.
Thompson, Senior Vice President and Corporate Secretary, Cash Store Financial,