Midas Obtains Commitment for New Credit Facility

Midas, Inc., has signed a commitment letter with Foothill Capital Corporation, a wholly owned subsidiary of Wells Fargo & Company, and Ableco Finance LLC, a specialty finance company focusing on refinancings, leveraged lending and asset-based facilities, for a new $140 million U.S. asset-based credit facility to refinance a substantial portion of the company’s existing debt.
The three-year facility includes a $48 million revolving line of credit and $92 million in term loans, whose rates will float based on LIBOR and prime rates. All figures in U.S. dollars.
“We were working with a number of potential lenders in the second half of 2002 while exploring alternative financing to replace our current line of credit that matures on Jan. 29,” said William Guzik, Midas’ senior vice president and chief financial officer. “This commitment will enable Midas to begin the process of focusing our resources and energies on executing the strategies to grow the company’s profitability,”
Guzik said the new facility will be secured by the company’s assets, including owned real estate, inventories and accounts receivable.
The commitment letter is subject to agreement by the company’s existing lenders to provide $40 million of subordinated debt. Midas intends to close the new facility during January.
Midas’ total debt at the end of the fourth quarter, excluding finance lease obligations, was $141.2 million.
Midas is one of the world’s largest providers of automotive service, offering exhaust, brake, steering and suspension services, as well as batteries, climate control and maintenance services at 2,700 franchised, licensed and company-owned Midas shops in 19 countries, including nearly 2,000 in the United States and Canada.