MISSISSAUGA, Ont. – The Second Cup Ltd. (TSX:SCU) has signed a deal for a four-year, $8-million secured term loan from an affiliate of Serruya Private Equity following a review of its strategic options.
The company says proceeds from the loan will be used to repay its existing $6-million credit facility and for general corporate purposes.
Second Cup had established a special committee to review its strategic options. Such moves often result in a sale or other major transaction.
The company said Monday that the special committee has fulfilled its mandate and is no longer required.
The loan carries an interest rate of 10 per cent and includes warrants to purchase up to 600,000 common shares at a strike price of $2.75 per share.
The company has also agreed to nominate someone from Toronto-based Serruya Private Equity to sit on its board of directors.
The Second Cup was founded in 1975 and has more than 295 franchised and company-owned cafes in Canada.