TORONTO, April 14 Canadian payday loan provider
Cash Store Financial Services Inc said on Monday it
will seek protection from creditors as it faces liquidity
problems resulting from the suspension of its right to offer
loans in the province of Ontario.
In February, the Edmonton, Alberta-based company said it was
voluntarily delisting its shares from the New York Stock
Exchange as its share price had plummeted and it could not meet
the exchange's listing requirements.
Last month, Cash Store said it was in talks with some of its
creditors to address near-term liquidity issues that arose after
its right to offer loans in Ontario, Canada's most populous
province, was suspended.
The company's share price has fallen nearly 98 percent over
the last two years and its Toronto-listed shares closed Friday
at 14 Canadian cents.
Cash Store said on Monday it plans to bring an application
in the Ontario Superior Court of Justice to seek protection from
creditors under the Canadian Companies' Creditors Arrangement
Its board has also authorized the company to enter into a
debtor-in-possession (DIP) financing package enabling it 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," the company said in a brief statement.
The company, which employs about 2,000 nationwide, said the
CCAA protection and the DIP financing agreement are subject to
approval by the Ontario Superior Court of Justice.
Cash Store said it will remain open for business during the
CCAA proceeding, and daily lending would not be affected.
(Reporting by Euan Rocha; Editing by Peter Galloway)