MONTREAL, March 3, 2014 /CNW Telbec/ - Le Château Inc. (TSX: CTU.A) has entered into an agreement with a Corporation controlled by Jane Silverstone Segal, Chairman and Chief Executive Officer and a Director of the Company, for long-term financing of $5.0 million. The financing is in the form of a four year, unsecured loan which bears interest at an annual rate of 5.5%, is repayable at maturity on February 28, 2018, and may be prepaid, in whole or in part, at any time. The principal of the loan is convertible, in whole or in part, at any time by the Company into Class A shares of the Company at a price per share equal to the market price of the shares at the time of conversion.
The loan will be used towards the Company's new concept store renovation program. These include Carrefour Laval and Galeries d'Anjou in Quebec opening in March 2014, White Oaks Mall in London, Ontario opening in April 2014 and Richmond Centre in British Columbia opening in May 2014. These will join already renovated new concept stores: Carrefour Laval Men's and St-Bruno in Quebec, Sherway Gardens in Ontario and most recently our latest new franchise store in Dubai Mall, United Arab Emirates.
The loan is in addition to other financing sources the Company has in place or may have in place in the future. The loan will provide the Company with additional capital and operational flexibility as all of its existing credit and other facilities remain in place. The Company has an asset based credit facility totaling $70 million under which it had $43.2 million drawn as of February 28, 2014. In addition, the Company has an import line of credit of $25 million, which includes a $1 million loan facility, under which $5.5 million of letters of credit are currently outstanding and $0.4 million is drawn under the loan facility. The Company uses such facilities and lines of credit from time to time in the ordinary course of its business.
The transaction was approved by all of the disinterested directors of the Company and is exempt from the requirements to obtain an independent valuation or minority approval under the related party transaction rules of applicable securities legislation.
Profile
Le Château is a leading Canadian brand in specialty retailing, offering a broad array of contemporary fashion apparel, accessories and footwear for style-conscious women and men. The Le Château brand is sold exclusively through the Company's 229 retail locations, of which 228 are located in Canada. The Company's retail locations are primarily found in major urban shopping malls, as well as street-front locations with high pedestrian traffic. In addition, the Company has 7 stores under license in the Middle East and Asia. Le Château's web-based marketing is further broadening the Company's customer base among internet shoppers in both Canada and the United States. With its 54-year tradition of vertical integration, emphasizing a design and manufacturing approach to retailing, Le Château is unique among Canadian fashion merchants.
Forward-Looking Statements
This news release may contain forward-looking statements relating to the Company and/or the environment in which it operates that are based on the Company's expectations, estimates and forecasts. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond the Company's control. A number of factors may cause actual outcomes and results to differ materially from those expressed. These factors include those set forth in other public filings of the Company. Therefore, readers should not place undue reliance on these forward-looking statements. In addition, these forward-looking statements speak only as of the date made and the Company disavows any intention or obligation to update or revise any such statements as a result of any event, circumstance or otherwise except to the extent required under applicable securities law.
Factors which could cause actual results or events to differ materially from current expectations include, among other things: the ability of the Company to successfully implement its business initiatives and whether such business initiatives will yield the expected benefits; competitive conditions in the businesses in which the Company participates; changes in consumer spending; general economic conditions and normal business uncertainty; seasonal weather patterns; fluctuations in foreign currency exchange rates; changes in the Company's relationship with its suppliers; interest rate fluctuations; and changes in laws, rules and regulations applicable to the Company.
Image with caption: "Dubai Mall, United Arab Emirates. (CNW Group/LE CHATEAU INC.)". Image available at: http://photos.newswire.ca/images/download/20140303_C8560_PHOTO_EN_37400.jpg
Image with caption: "Carrefour Laval Men's, Québec. (CNW Group/LE CHATEAU INC.)". Image available at: http://photos.newswire.ca/images/download/20140303_C8560_PHOTO_EN_37398.jpg
SOURCE: LE CHATEAU INC.
Emilia Di Raddo, CPA, CA, President (514) 738-7000
Johnny Del Ciancio, CPA, CA, Vice-President, Finance, (514) 738-7000
MaisonBrison: Pierre Boucher, (514) 731-0000
Source: Le Château Inc.
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