Replacement of Banking Services
Perth, Feb 9, 2016 AEST (ABN Newswire) - Cash Converters International Ltd (
ASX:CCV) is pleased to announce that the Company has entered into a loan securitisation facility with the Fortress Investment Group (Fortress). This facility re-finances the existing banking facility on terms which are market competitive.
The Fortress facility covers a five year term, with an initial three year loan period and an option for a two year extension at the Company's discretion. It allows for a drawdown of up to $100 million, compared to $70 million under the current facility, with the drawdown criteria being less restrictive than the current facility. There are no restrictions regarding the Company's ability to pay dividends, it does not impose EBITDA or gearing ratio covenants and loans originated online (a key growth origination channel) are unrestricted, whereas under the current facility online loans were limited to a 35% cap of the loan book. The rights of Fortress to suspend or cancel the facility include: if a change of control occurs in respect of the Company or the Company is suspended from listing on the Australian Stock Exchange for more than 15 business days.
The Fortress facility is planned to commence in March 2016, ensuring a seamless transition between the current and Fortress facilities.
The Company has also signed a five year agreement with a service provider to replace its existing transactional banking facilities. It is progressively transitioning its existing facilities in a measured and deliberate manner, to ensure no disruption is experienced by its customers, franchisees, employees and suppliers.
The transition to a replacement transactional banking service provider is expected to be complete by July 2016.
Cash Converters Managing Director, Peter Cumins said, "The new financing and banking arrangements are key steps in the Company's growth plans. The terms and conditions of the new facility are more aligned to the business strategy of the Company than our previous supplier. Our businesses are well placed to take advantage of our leading market position and established brand.
We now have the funding and banking arrangements to support future growth."
About Cash Converters International Ltd
Cash Converters International (ASX:CCV) is a franchised retail network listed on the ASX. It specialises in the sale of second-hand goods. The Cash Converters group employs modern retailing practices, professional management techniques and high ethical standards to the management of its stores throughout the chain which appeal to a wide cross section of the community. As a result, Cash Converters has been able to position its outlets as credible retail merchandise stores, resulting in a profitable market for the group.
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