AutoCanada Inc. announced that it has entered into a new $240 million revolving floorplan facility agreement with The Bank of Nova Scotia, replacing its existing facility with Ally Credit Canada. In a news release, the company says its new revolving floorplan facility will be used to finance the purchase of new and used vehicle inventory at twenty-one of AutoCanada’s dealership locations.
The company says its new credit agreement contains certain terms and conditions which differ from the company’s prior credit agreement, including more favourable interest rates, as well as new financial covenants. Based on the current floating rate and borrowing levels, the Company expects the agreement to produce annual savings in interest costs in excess of $1 million under the new agreement.
“Management is very pleased to have entered into the new facility with Scotiabank. The level of commitment to our business by Scotiabank is representative of their reputation in the industry as a leading provider of automotive finance in Canada,” said Pat Priestner, CEO of AutoCanada. “We would like to thank the management team at Scotiabank Dealer Finance for their hard work in setting up the facility, which we believe will be mutually beneficial over the short term and long term.”
Mr. Priestner also said: “We are also very appreciative of the opportunity to have worked with Ally Credit Canada over the past three years and the very good service they had provided to us during that time.”
AutoCanada is one of Canada’s largest multi-location automobile dealership groups, currently operating 26 franchised dealerships in six provinces and has more than 1,100 employees. AutoCanada currently sells Chrysler, Dodge, Jeep, Ram, FIAT, Chevrolet, GMC, Buick, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, and Volkswagen branded vehicles. In 2011, our dealerships sold approximately 28,000 vehicles and processed approximately 300,000 service and collision repair orders in its 333 service bays during that time.
