Grandetel Technologies Exchanges Lafe Shares And Purchases
Debentures For Cancellation
TORONTO, Feb. 11 /CNW/ - GrandeTel Technologies Inc. today announced that it has taken
actions that will increase the value of its investment in Lafe International Holdings Ltd. and lower
interest charges.
GrandeTel will exchange its 13.87 million shares (representing 10% of the issued shares) of Lafe
for 9.67 million shares (or 10.6% of the issued shares) of Nakamichi Corp., a public company
whose shares are listed on the Tokyo Stock Exchange.
The exchange results from the sale by The Grande Holdings Limited (``Grande''), which holds
28.4% of GrandeTel, of its 60% interest in Lafe to Nakamichi for Yen31,900 million, and the
subsequent purchase by Grande of a 70% interest in Nakamichi for Yen35,200 million. These two
transactions closed on January 16, 1997. The closing price of the Nakamichi shares on January 16
on the Tokyo Stock Exchange was Yen425 per share (about US $3.50 per share).
GrandeTel originally acquired its 10% interest in Lafe for US $7.3 million in April 1996, at the
same price per share paid by Grande at that time. Under the terms of the April 1996 transaction,
GrandeTel was granted ``piggy back'' rights for any transaction whereby Grande disposed of its
Lafe shares. These ``piggy back'' rights gave GrandeTel the right to participate with Grande on the
same terms as it obtained in any transaction to dispose of its Lafe shares.
Completion of the share exchange is subject to obtaining necessary approvals. Unless waived by
the Tokyo Stock Exchange on application with reasons, GrandeTel will be required to hold the
Nakamichi shares for two years under Japanese securities laws. Nakimichi is principally engaged
in the design and manufacture of audio products, as well as computer peripheral products. It
recorded annual sales of US $167 million for the fiscal year ended February 20, 1996.
GrandeTel also announced that it has purchased for cancellation US $10 million of its 8% senior
convertible subordinated debentures in a series of open market transactions for a total price of US
$3.7 million. As a result, GrandeTel will record a one-time gain of US $6.3 million, which will be
included in its financial results for the year ended January 31, 1997.
The purchases by GrandeTel were financed by existing bank credit arrangements. The cancellation
of the debentures is expected to result in net annual interest savings for GrandeTel of US
$600,000 per year.
In a further development, the Court dealing with the class action lawsuits against the company as a
result of the actions of previous management has designated January 1998 as the hearing date for
the trial.
The Company's fiscal 1997 financial results are expected to be announced in late April.
GrandeTel is a Canadian company with its North American headquarters in Toronto, Ontario and
its Asian headquarters in Hong Kong. The Company holds interest in joint ventures that
manufacture telecommunications products and provide paging and cellular telephone services in
the PRC. The Company's common shares and debentures trade on the NASDAQ service. |
