RCG Companies Inc. (AMEX: RCG) has received a $2 million credit facility from a private investment group to replace existing letters of credit totaling the same amount secured by cash held in a collateral account.
With the new credit facility in place, RCG says it will release the $2 million of cash in the collateral account and make it immediately available for general business needs.
The $2 million credit facility will be used to support the business activities of RCG’s wholly owned subsidiaries, the recently-acquired SunTrips of San Jose and Atlanta-based Vacation Express, according to the Charlotte-based company.
“This new credit facility will substantially increase our cash on hand,” said Michael Pruitt, chief executive officer of RCG, “and consequently provide more financial flexibility to the company.”
The majority of RCG’s revenues are currently derived from Flightserv, its wholly owned travel services subsidiary. In October 2003, Flightserv acquired SunTrips and Vacation Express, whose travel packages are marketed and sold directly to the consumer, as well as by more than 2,000 travel agencies across the United States.
RCG is also involved in the technology services sector, through its wholly owned software and IT services segment, Logisoft Corp.
RCG Companies: www.rcgcompanies.com