Home Capital Agrees with National Energy Corporation on the Early Termination
of Financing Arrangements, Including Related Compensation
TORONTO, June 5, 2014 /CNW/ - Home Capital Group Inc. ("Home Capital")
(TSX:HCG) announced today that its wholly owned subsidiary, Home Trust Company
("Home Trust") has agreed with its customer National Energy Corporation
("National") on the termination and repayment of financing arrangements
currently totaling approximately $236 million related to National's sales and
rentals of water heaters.
Earlier today, National's parent company, Just Energy Group, Inc., announced
that it has entered into an agreement to sell the shares of National to
Reliance Comfort Limited Partnership (the "Sale Transaction"). In connection
with the Sale Transaction, National and Home Trust will terminate their
The termination and repayment will be effective on closing of the Sale
Transaction. The Sale Transaction is subject to, among other things, the
approval of the federal Competition Bureau. The agreement between National and
Home Trust includes compensation to Home Trust for the early termination of
the water heater financing arrangements. Home Trust's compensation is expected
to be in the range of $32 million to $38 million (before tax). This will
compensate Home Trust for interest that would have been received over the
original contractual terms of the financing arrangements, which extended over
a range of periods ending in 2023. Home Trust will continue to provide
financing to National until closing of the Sale Transaction.
At closing of the Sale Transaction, National will repay to Home Trust the
outstanding financing, along with the associated early termination
compensation, which will be recorded in the consolidated income of Home
Capital. The amount of the early termination compensation will depend on the
amounts and remaining contractual terms of the financing arrangements at
closing of the Sale Transaction. Following that date, no further interest
income from National will be recorded by Home Trust.
About Home Capital and Home Trust
Home Capital Group Inc. is a public company, traded on the Toronto Stock
Exchange (HCG), operating through its principal subsidiary, Home Trust
Company. Home Trust is a federally regulated trust company offering deposits,
residential and non-residential mortgage lending, securitization of insured
residential first mortgage products, consumer lending and credit card
services. Licensed to conduct business across Canada, Home Trust has offices
in Ontario, Alberta, British Columbia, Nova Scotia, Quebec and Manitoba.
Caution Regarding Forward-looking Statements
This press release contains forward-looking information within the meaning of
applicable Canadian securities legislation. Please refer to the Home Capital's
2013 Annual Report, available on Home Capital's website at
www.homecapital.com, and on the Canadian Securities Administrators' website at
www.sedar.com, for Home Capital's Caution Regarding Forward-looking Statements.
SOURCE Home Capital Group Inc.
Gerald M. Soloway, CEO, or Martin Reid, President, 416-360-4663,
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CO: Home Capital Group Inc.
NI: FIN LOAN MNA
-0- Jun/05/2014 21:00 GMT
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