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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): November 20, 1996
TFC ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
1-11121 54-1306895
(Commission File Number) (I.R.S. Employer Identification No.)
5425 Robin Hood Road, Suite 101B 23513
Norfolk, Virginia (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (757) 858-1400
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ITEM 5. OTHER EVENTS
A press release regarding the execution of a commitment letter with its
primary lender, General Electric Capital Corporation--Exhibit 99.11
The exhibits on the accompanying Exhibit Index are filed or
incorporated by reference as part of this Form 8-K and the Exhibit
Index is incorporated herein by reference.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TFC ENTERPRISES, INC.
By: /s/ DAVID W. KARSTEN
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David W. Karsten
VP, Treasurer, and CFO
Date: November 21, 1996
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT SEQUENTIAL PAGE NO.
- ----------- ---------------------- -------------------
99.11 Press release dated November 20, 1996 5
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EXHIBIT 99.11
CONTACT: Robert S. Raley, Jr. TFC ENTERPRISES, INC.
757-858-4054 NEWS RELEASE
*FOR IMMEDIATE RELEASE*
TPC ENTERPRISES ANNOUNCES PROGRESS ON
CREDIT FACILITY NEGOTIATIONS WITH GECC
NORFOLK, VA, November 20, 1996 /PRNewswire/ -- TFC Enterprises, Inc. (NASDAQ:
TFCE) today announced that its subsidiary The Finance Company (TFC) had
executed a commitment letter with its primary lender, General Electric Capital
Corporation (GECC), for an extension of its credit facility. Under the terms of
this letter, the new amended and restated Loan and Security Agreement (LSA)
would run through December 31, 1998, and provide a $150 million credit line to
TFC. Under the terms of the new LSA, GECC would be granted warrants to purchase
up to 5% of the outstanding shares of TFC Enterprises, Inc. at $2.00 per share
over a 4-year period. The new facility would carry an interest rate of 400
basis points over 30-day LIBOR with the ability to reduce the rate to 350 basis
points over 30-day LIBOR if certain covenant reductions are met. TFC is
currently using approximately $72 million of this facility.
"We are pleased and excited with the terms of this commitment letter" said
Robert S. Raley, Chairman and CEO. He added "this will provide the funding
that gives the Company the opportunity to achieve its business plan for 1997
and 1998."
Additionally, the Company announced that its subsidiary First
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Community Finance (FCF) has received a non-binding letter of proposal for a
credit facility of $15 million from Hibernia National Bank, located in New
Orleans, LA. Hibernia commenced its due diligence on November 11, 1996.
Although at this stage the Company cannot offer any assurance that this
facility will be funded, it is encouraged by Hibernia's interest in the FCF
facility.
Although the Company has executed the commitment letter with GECC, given the
uncertainties associated with the negotiations still to occur, it cannot offer
any assurance that it will be able to enter into a definitive LSA on terms
consistent with the letter. Subject to these uncertainties, the Company hopes
that the LSA will be executed within the next few weeks. The Company also is
still negotiating with its other two principal lenders regarding the terms of
existing forbearance agreements. The Company hopes that the signing of the GECC
commitment letter will help to resolve similar issues with these other
lenders.
The Company also announced that it has filled its Chief Financial Officer and
Controller positions. The positions previously held by two employees have been
combined and will be filled by David W. Karsten. Mr. Karsten began employment
on November 4, 1996, and will be headquartered at the Company's Executive
Offices in Norfolk, VA. His background includes 11 years with an insurance
company as senior vice president and controller,
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and 5 years with a Big Six public accounting firm, both in the Washington, DC,
area. Mr. Karsten received his MBA from the Kellogg Graduate School of
Management at Northwestern University and has been a CPA since 1976.
In addition to historical information, this press release contains forward
looking statements that are subject to risks and uncertainties that could cause
the Company's actual results to differ materially from those anticipated in
these forward looking statements. Readers are cautioned not to place undue
reliance on these forward looking statements, which reflect management's
current analysis. For example, during 1997 the Company's operations could be
materially adversely affected if interest rates were to rise, if credit
experience deteriorated, or the Company were to face increased competition.
TFC Enterprises, Inc., through its wholly-owned subsidiary The Finance Company
specializes in purchasing and servicing installment sales contracts originated
by automobile and motorcycle dealers. Through First Community Finance, Inc.,
another wholly-owned subsidiary, TFC Enterprises, Inc. is involved in the
direct origination and servicing of small consumer loans. Based in Norfolk, VA,
TFC Enterprises, Inc., also has offices in Dallas, TX; Jacksonville, FL; San
Diego, CA; and throughout Virginia and North Carolina.
