Midas repays $34 million of term loans, meeting target for return of warrants

By Peter Heap

New York, Dec. 19 - Midas, Inc. said it has repaid $34 million of term loan debt, beating the $33 million target for 2003 and allowing it to reclaim 500,000 warrants issued in a debt restructuring in March.

The Itasca, Ill. auto service company said it expects to repay more bank debt by the end of the year.

As part of its debt restructuring, Midas issued detachable warrants for 1 million shares with a provision that 50% would be returned if it reduced term debt by $33 million be Jan. 4. The warrants are exercisable at $0.01 for 10 years.

Midas now has $98.5 million of term loans outstanding and an undrawn $40 million revolver. The company added that it has voluntarily reduced the revolver to $25 million.

Initially the credit facilities were for $172.5 million, made up of the $40 million revolver and $132.5 million in two term loans.

"The ability to significantly reduce our debt level is the result of the progress we are making in restructuring our operations to focus on the profitable franchising business and to exit the unprofitable wholesale distribution business," said William M. Guzik, Midas' senior vice president and chief financial officer, in a news release.

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