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TORONTO, ONTARIO--(Marketwired - Feb 18, 2016) - Chesswood Group Limited (TSX:CHW) ("Chesswood") announced today that it has completed the previously announced sale of its EcoHome Financial Inc. ("EcoHome") subsidiary to Dealnet Capital Corp. ("Dealnet") (TSX VENTURE:DLN) for a purchase price of $35.0 million, resulting in a pre-tax gain of approximately $10.0 million.
Of the $35.0 million purchase price, $29.0 million was paid in cash and Dealnet issued to Chesswood 6,039,689 million common shares of Dealnet and a $2.5 million convertible note which will mature in February 2018 and provides for interest at 6% per annum and the right of Chesswood to convert in whole or in part at any time to acquire additional common shares of Dealnet at a conversion price of $0.64.
"As we previously announced, the sale of EcoHome completes our process of becoming singularly focused on our commercial finance businesses and the many growth opportunities they offer, while generating a significant return for our shareholders on the sale," said Barry Shafran, Chesswood's President and CEO.
With modest leverage, multiple funding lines, and a demonstrated ability to grow, Chesswood is well positioned to capitalize on opportunities offered by its Canadian and U.S. businesses and markets, and continue its pattern of long-term growth with superior returns on equity. Chesswood's finance receivables totaled CDN$480 million at December 31, 2015 excluding the EcoHome portfolio.
Chesswood also announced today that its board of directors has declared a special dividend of $0.50 per share to shareholders of record as of February 29, 2016. This special dividend will be paid on or about March 15, 2016.
Chesswood has designated its dividends as eligible dividends for purposes of the Income Tax Act (Canada).
"Our balance sheet is very strong coming off another year of excellent earnings and sizable gains generated from the recent sale of our two non-core businesses. We are very happy to be able to share the benefits of these gains with our shareholders," added Shafran.
About Chesswood Group Limited
Chesswood Group Limited is a dividend-paying financial services company with operating businesses in both Canada and the U.S., including its North-American equipment finance businesses Pawnee Leasing Corporation of Fort Collins, Colorado and Blue Chip Leasing Corporation of Toronto, Ontario, and its working capital loan business, Windset Capital Corporation, headquartered in Utah.
To learn more about Chesswood Group Limited, visit www.ChesswoodGroup.com, The separate websites of Chesswood Group Limited's operating businesses are at www.PawneeLeasing.com, www.WindsetCapital.com and www.BlueChipLeasing.com.
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Chesswood Group Limited