Easyhome to raise C$10 million in stock sale
Also reports on investigation of financial kiosk fraud
Michael J. Knell -- Furniture Today, December 15, 2010
MISSISSAUGA, Ontario — Easyhome said it expects to raise C$10 million in a private placement of about 1.2 million of its common shares.The price per share was set at C$8.50, which was the trading price on the Toronto Stock Exchange for most of the past few days.
Toronto-based investment firm Raymond James Ltd. is the lead underwriter, with Toronto firms Cormark Securities and Paradigm Capital also participating.
Easyhome has granted the underwriters an option to purchase an additional 176,470 shares at C$8.50. If the option is exercised, the rent-to-own merchant will raise a total of C$11.5 million.
The deal is still subject to regulatory approval and is expected to close on Dec. 23.
In a statement, the company said it "intends to use the net proceeds from the financing to fund growth initiatives at its existing Easyfinancial services kiosks and for general corporate purposes, including debt repayment."
In September, an Easyfinancial manager was accused of defrauding the company of about C$3.4 million. Neither the employee nor the store location has been identified, although the company reported the employee's direct supervisors were dismissed.
Easyhome also said that it has completed its internal investigation into the recent employee fraud case.
"There was no evidence to suggest that the perpetrator of the fraud conspired with others at the company; there was no indication that senior management of the company or any other employee participated in, knew of or attempted to cover up the fraud; and that while other instances of fraud have occurred, no other significant instances of fraud were discovered," the company said.
In the future, the audit committee of Easyhome's board of directors will be responsible for overseeing the company's anti-fraud program. The cost of the committee's investigation has been approximated at C$2.3 million, which will expensed in the fourth quarter.
Easyhome also said it has hired an experienced vice president of risk management, although it did not identify that person, and two new field auditors who are independent of operations, along with three former Wells Fargo employees as Easyfinancial regional managers.
The company also said it will restate its financial statements for the first two quarters of 2010 as well as the annual consolidated financial statements for 2009.
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Easyhome to Raise C$10M in Private Stock Placement
Dec 23, 2010
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