Cash Store Financial To Seek Creditor Protection; Reaches Deal For DIP Financing

(RTTNews) - Cash Store Financial Services Inc. (CSFSF.PK) announced Monday that its board has voted to authorize the Company and its subsidiaries to bring an application in the Ontario Superior Court of Justice to seek protection from creditors under the Companies' Creditors Arrangement Act or "CCAA".

Cash Store Financial's board has also authorized the Company and its subsidiaries to enter into a debtor-in-possession or "DIP" financing agreement pursuant to which up to $20.5 million will be available to the Company to enable the Company and its affiliates to continue operations during the CCAA proceedings.

Protection under the CCAA and the financing available under the DIP financing agreement will provide Cash Store Financial with the time and stability to attempt to restructure its affairs under the CCAA. The CCAA protections and the DIP financing agreement are subject to approval by the Ontario Superior Court of Justice.

The company said it will provide a further update on these matters once more information is available.

The company noted that it will remain open for business during the CCAA proceeding, its branches will continue to operate and daily lending will not be affected.