Jul. 28, 2011 (Marketwire) --
EDMONTON, ALBERTA -- (Marketwire) -- 07/28/11 -- COMMERCIAL SOLUTIONS INC. ("Commercial" or "Company") (TSX:CSA) a leading Canadian distributor of bearings, power transmission equipment, oilfield, industrial, safety products announced today it has increased its senior secured asset-based credit facility (the "ABL Facility") with the Bank of America, N.A. by $7,000,000 which provides Commercial additional liquidity to repay its mezzanine loan prior to its maturity of October 8, 2011 and support Commercial's anticipated growth.
A total of $2,500,000 of the $3,000,000 mezzanine loan will be prepaid on July 29, 2011 to the mezzanine lenders that opted for prepayment. The Company intends to repay the remaining $500,000 on maturity. There are no prepayment penalties to be paid to the mezzanine lenders. The replacement of the high cost mezzanine debt with the ABL Facility will provide Commercial with immediate interest savings and provide certainty to funding Commercial's recovery and growth in the years ahead. The amended agreement is a $23,000,000 credit facility and includes an extension of the term by one year to October 8, 2014. Commercial has a further opportunity to increase the ABL Facility to $25,000,000 to fund future growth provided it continues to be in compliance with all covenants on a pro forma basis after giving effect to the increase in borrowing amount. There are no changes in the covenant requirements and the pricing from the original agreement.
Jim Barker, President and CEO of Commercial noted, "We are proud to announce the repayment of the mezzanine debt ahead of the original schedule as it allows us to grow with less costly capital. We are delighted with the relationship we have built over the last ten months with the Bank of America, N.A.; their support demonstrates a great vote of confidence and illustrates the strength of our balance sheet. Certainty of funding is another milestone in our continued momentum and will allow for growth in the future."
Headquartered in Edmonton, Alberta, Commercial is one of Canada's leading independent industrial distributors with 23 Services Centres and approximately 250 employees located primarily in Western Canada. Commercial offers more than 160,000 items critical to maintenance repair and operations (MRO) and original equipment manufacturer (OEM) customers. The Company represents 450 leading manufacturers and serves over 11,000 customer accounts within a broad cross-section of industries, including oil and gas, forestry, firefighting, food processing, chemical processing, mining, utilities, manufacturing, agriculture and construction. Commercial trades under the symbol "CSA" on the Toronto Stock Exchange. For further information on the Company, please visit www.commercialsolutions.ca and for detailed financial information visit www.sedar.com.
Commercial Solutions Inc.
Rozina Kassam, CA
Chief Financial Officer
(780) 577 4360
Commercial Solutions Inc.
President and Chief Executive Officer
(780) 577 2220