|
An interesting situation if they can pull off this deal. First Telecom has just resumed trading after what looks to be a blockbuster newsrelease. The stock is trading in the .30 area so obviously the market must have some reservations about the deal being completed. There will certainly be speculation in the days ahead looking at the magnitude of the deal and if they do manage to lock up this deal this could be a homerun.
FIRST TELECOM CORP ("FTL-V;FTLMF-L")
- Negotiating Agreement
First Telecom Corporation wishes to announce that the Company is
currently negotiating an agreement to acquire Vancouver Telephone Company
Limited ("VANTELCO") and it's Canadian subsidiaries VTC Canada and Enhanced
Telecom Services Inc. ("ETS"), and it's U.S. subsidiary Sattel Global
Networks Inc. Consolidated revenues for fiscal 1998 for VANTELCO are
estimated to be over $17 million.
The general framework of this proposed transaction is for the Company
to initially inject working capital into VANTELCO in two stages by way of a
convertible debenture, followed later by second stage funding and a share
exchange between the Company and all the shareholders of VANTELCO.
VANTELCO and it's Canadian subsidiaries VTC Canada and ETS supply long
distance service, local line access, internet access, travel cards (calling
cards) and telecommunication equipment, business phone systems, prepaid
telephone cards, Clearnet digital PCS phones, and presently have over
12,000 active customers with approximately 25,000 lines in service in
British Columbia, with a further 3,000 active customers in the Metropolitan
Toronto area (the Toronto office opened in January 1998).
VANTELCO's wholly-owned U.S. subsidiary, Sattel Global Networks Inc.,
is located in Chatsworth, California. It's main business is the design and
manufacture of commercial satellite DAMA systems for high-end PTT (public
telephone & telegraph) service providers. On April 15, 1998, Sattel Global
Networks acquired the bulk assets of Sattel Technologies Inc. ("SATTEL").
SATTEL is focused exclusively on DAMA sales to PTT's in the growing foreign
rural telecom market. During it's first 12 years of operation SATTEL had
approximately $150 million in total sales. SATTEL derives revenue through:
1) sale of DAMA system engineering and customization services to meet
specific customer requirements, 2) sale of network control centers (NCC's),
3) sale of earth station equipment, primarily modems, and 4) after-sale
customer support services. Item (3) represents the bulk of SATTEL's sales.
With key customers planning to greatly expand their DAMA networks
immediately, very significant sales growth potential is anticipated.
SATTEL was the first company in the world to re-use a satellite
retrieved from space by the NASA space shuttle. Under a US$130 million
prime contract from the Indonesian government, SATTEL refurbished and
relaunched the Palapa B2-R satellite in May 1990 with the assistance of
subcontractors that included Hughes Aircraft (refurbishment) and McDonnell
Douglas (launch services).
SATTEL'S technology in network control centers and modems is the most
advanced in the world. SATTEL has become the world leader in Single Channel
per Carrier (SCPC) Demand Assignment Multiple Access (DAMA) systems for
public telephone networks. SCPC-DAMA is widely recognized as the most cost
effective and flexible telecommunications system for wide area thin-route
traffic networks. Its use is rapidly expanding in third world countries. As
a result, SATTEL's SCPC-DAMA satellite terminals cover the entire world,
operating in over 400 cities in Asia, the Pacific, and Central America.
SATTEL's customers include communications infrastructure contractors,
public telephone & telegraph companies and other telecommunications
carriers, producers and distributors of news and entertainment content,
corporations and internet service providers (ISP's). A partial list of
customers include major government owned public network service providers
such as Telstra of Australia, the largest telephone company in the southern
hemisphere, Perumtel Telkom of Indonesia, Guatel of Guatemala to mention a
few.
SATTEL's earth station installations for public and private networks
around the world are located in over 20 countries including: Australia,
China, C.I.S. (Moscow), the Cook Islands, Fiji, Guatemala, Indonesia,
Kazahkstan, Kiribati, Marshall Islands, Nauru, New Zealand, Nigeria, Niue,
the Philippines, Sakhalin Island, Syria, Taiwan, Tuvalu, U.S.A., and
Western Samoa.
All the terms and conditions of this proposed transaction are subject
to acceptance by the applicable regulatory authorities.
Per: (signed) "Richard L. Liu" President
TEL: (604) 602-7114 Christian Brule, Director
FAX: (604) 602-7134
e-mail: cbrule@netcom.ca |
|
