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- Release Date: 17/04/13 17:05
- Summary: GENERAL: SCY: SMITHS CITY ARRANGES LOWER COST FUNDING - 17.4.13
- Price Sensitive: No
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SCY
17/04/2013 15:05
GENERAL
REL: 1505 HRS Smiths City Group Limited
GENERAL: SCY: SMITHS CITY ARRANGES LOWER COST FUNDING - 17.4.13
SMITHS CITY ARRANGES LOWER COST FUNDING
The Directors of Smiths City Group Limited (SCY) advised late last year that
it was their intention to refinance the 100% owned customer credit subsidiary
Smithcorp Finance Limited (SCF) with a major trading bank.
This would terminate the existing bulk funding facility from Fisher & Paykel
Finance Limited (FPF) which has served the company for almost 30 years.
From today ANZ Bank are providing a Senior Revolving Secured Facility of
$75million to SCF on significantly more favourable terms. The existing costs
from FPF including all fees and margins is over 10% and forecast to move over
11% in the next year. The new arrangements through ANZ will cost about 6%
based on current interest rates.
Chairman Craig Boyce said that "Following the GFC and, particularly since
2010, with changes in NZ regulatory requirements on non tier one funders both
as to ratios and margins, the company has seen the need to make this change.
There will be substantial benefit in future years from lower costs, however,
we were disappointed to have to incur in the current year "break fees" of
$1.4m for early termination of the FPF facility. The new arrangements will
require an equity injection of $6m in SCF and this will be provided from the
Groups cash resources.
This refinancing is a significant and positive development for Smiths City
and will ensure we have competitive costs and ongoing ability to operate our
100% owned customer credit company.
In our next update to shareholders in June when we outline the results for
the financial year to 30th April 2013 we will provide further details on this
funding change as well as good progress with our Christchurch insurance
claims and the Colombo Street building development."
CRAIG BOYCE
CHAIRMAN
Smiths City Group
0295345508
End CA:00235307 For:SCY Type:GENERAL Time:2013-04-17 15:05:37
