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 "Lenders").

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 acquisitions; and
  • 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.

About Rocky

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 and on SEDAR at

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 forward-looking statements.

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

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