KSAT Satellite Networks Inc. announces memorandum of understanding
Trading Symbol: KSA
VANCOUVER, Oct. 4 /CNW/ - KSAT Satellite Networks Inc. today announced that it has entered into a memorandum of understanding (the "MOU") with its principal shareholders, Global Space Investments Limited ("Global"), Gilat Satellite Networks Ltd. ("Gilat") and Steven Shao Hong Wan ("Wan").
Under the terms of the MOU, the parties have agreed, among other things, that Global will convert U.S.$2,045,895 of the principal amount of U.S.$7,500,000 of a convertible debenture previously issued by KSAT to Global into an aggregate of 2,273,217 common shares of the Corporation. Following the completion of the partial conversion of the debenture, KSAT will have an aggregate of 28,560,051 common shares issued and outstanding, of which Global and Gilat will each hold 10,606,550 common shares of the Corporation (each representing approximately 37% of the outstanding shares).
Each of Global and Gilat has also agreed to lend to KSAT U.S.$5,150,000 for a total sum of U.S.$10,300,000. KSAT has agreed to use approximately U.S.$8.5 million of these loans to repay certain existing liabilities of KSAT to Gilat and Global and their affiliates. These loans, which are at the LIBOR interest rate, are repayable in five equal semi-annual instalments commencing 18 months after the date of the loan. Under the terms of these loans, KSAT has the right to make earlier repayment within one month from the date of funds becoming available to KSAT from an equity or debt financing.
Under the MOU, Global, Gilat and KSAT have also agreed to work together to identify an appropriate joint venture partner in Mainland China, develop a business plan for the delivery of Internet services to homes in China under the "Gilat To Home-China" brand name and establish a Sino-Foreign joint venture enterprise which will have an exclusive right to offer broad band internet access via satellite in China. KSAT has also agreed to pay US$1,058,500 to Gilat for the installation of an upgrade to KSAT's existing hub to provide Internet Protocol connectivity and two-way broadband Internet access via satellite to enable KSAT to provide demonstrations and services for the proposed venture.
Under a separate amending agreement, Global, Gilat, KSAT and Wan have also agreed to amend their shareholders' agreement to give Gilat the right to appoint the Chairman and Chief Executive Officer of KSAT.
KSAT is in the satellite telecommunications business in China. The common shares of KSAT trade on the Canadian Venture Exchange under the trading symbol "KSA". KSAT's current business involves the manufacture and sale of very small aperture terminals ("VSATs"), the investment in and development of VSAT service networks in China and the provision of VSAT private network services through its Chinese joint venture partners to corporate and government customers.
The Canadian Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
For further information
Joseph Leung, Chief Financial Officer, (8610) 6510-2808, E-mail: ktnt@HK.Super.NET |
