WACO, Tex. - FirstCity Financial Corp. closed the sale of a 49% equity interest in its Drive Financial Services LP auto-lending unit to IFA, a unit of Bank of Scotland, for $15 million.
In addition, FirstCity was repaid $60 million for a loan to the auto-lending unit.
In a press release Monday, FirstCity said the deal generated $75 million of cash and will produce a third-quarter gain of $6 million. Simultaneously, it completed a debt restructuring, bringing it into full compliance with its lending covenants and resolving all defaults.
As reported Aug. 14, the company had fallen out of compliance with covenants of its senior revolving line of credit and subordinated debt facility on June 30.
As a result of the sale, FirstCity said, its debt dropped to $46 million, from $121 million. The remaining debt was restructured into a new, $53 million credit facility from Bank of Scotland.