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Dealership chain Holiday RV Superstores Inc. has received a $1.3 million cash advance from AGHI Finance Co., the lender that is controlled by Affinity Group Inc. (AGI) Chairman Steve Adams, who also is Holiday RV’s largest shareholder.
The additional cash will be used by Holiday RV to repay “certain indebtedness” of the company.
As a result of the cash advance, Holiday RV now owes Adams-controlled entities a total of $12.3 million.
To repay the $1.3 million, Holiday RV will wholesale certain Winnebago Industries Inc. units in its inventory and to sell its dealership in Las Cruces, N.M., according to a Securities & Exchange Commission (SEC) document filed by Holiday RV. Net proceeds from the retail sale of certain Winnebago units also are to be used to repay the cash advance.
Meanwhile, Holiday RV revealed that it is in default on a $5.1 million loan from Adams, who has the legal right to demand immediate repayment of the $5.1 million loan and the $12.3 million loan.
Additionally, Holiday RV announced that it, most likely, will not appeal its delisting from the Nasdaq SmallCap Market because it is unlikely that it will be able to show current or future compliance with Nasdaq marketplace rules.
If its stock is delisted, then Holiday RV shares would be quoted on the Bulletin Board maintained by the National Association of Securities Dealers and on the “pink sheets” published by the National Quotations Bureau.
AGI is the parent of TL Enterprises Inc., publisher of RV Business and RVBUSINESS.COM.