Apr. 15, 2010 (Filing Services Canada) -- Rocky Mountain Liquor Inc. (RUM - TSX Venture), ("Rocky Mountain Liquor" or the "Company"), listed on the TSX Venture Exchange (the "Exchange"), announces that its wholly owned subsidiary, Andersons Liquor Inc. ("Andersons") has signed a letter of intent to acquire a liquor store in Southern Alberta. The acquisition of the Southern Alberta store is subject to completing a definitive agreement, meeting various conditions precedent, and obtaining board approval (the "LOI").
On March 1, 2010, Andersons announced it was developing 2 new liquor stores, one in Southern Alberta and one in Lac La Biche. The public municipal hearing for rezoning in Southern Alberta was successful. We will begin construction as soon as building permits are finalized. If the acquisition and the new store are completed during this quarter, Andersons will operate seven stores in Southern Alberta, by the end of the second Quarter.
Development on the new Lac La Biche store is underway with all permits on hand. The store is scheduled to open in the second Quarter. The combined acquisition and development costs of these three stores, including inventory is estimated to be $2.7MM. Andersons has sufficient financial resources to complete these transactions with existing bank financing.
Andersons has completed the acquisitions of two previously announced liquor stores in St. Paul, Alberta on March 29th, 2010. Both stores are now in operation.
Andersons currently operates 29 stores and has previously announced the development of four other new locations. Should all of these transactions occur, including the new acquisition, which is the subject of the LOI, Andersons will own and operate 34 stores.
Interest Risk Management
Additional to our current $5.5 million dollar interest rate hedge and aligned with our previously announced interest rate mitigation strategy, Andersons has increased its hedge with a Canadian Chartered Bank. Effective April 6, 2010 a 5-year interest rate hedge in the amount of $4.5-million at 3.35% plus the applicable credit spread has been contracted.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the future growth and priorities for the Company, and the ability to execute the business strategy. Readers are cautioned not to place undue reliance on forward-looking statements, and should not rely on past performance when evaluating this acquisition, and in particular results achieved in 2008 and previous periods. Past results might not be a certain indication of future performance, which is subject to other risks, including but not limited to changes in operational policies, changes in management, changes in strategic focus, market conditions and customer preferences. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that these events may not materialize as well as those additional factors discussed in the section entitled "Risk Factors" in RUM's Management Discussion and Analysis, which can be obtained at www.sedar.com. If they do materialize, there remains a risk of non-execution for any reason (including but not limited to the inability to locate suitable acquisitions or new store development locations).
For further information:
Peter J. Byrne
Chief Executive Officer
(780) 686-7383
Tracey Bean
Chief Financial Officer
(780) 683-2326
Rocky Mountain Liquor Inc.
Suite 200
17834 106 Ave
Edmonton, AB, T5S 1V4
Source: Rocky Mountain Liquor Inc. (TSX-V RUM)
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