News out on LAN.
Is this latest development a good one?
newswire.ca
Plaintree Announces Amendment of Targa Group Deal
Preferred shareholders commit to conversion at
CDN$1.00 per Common share;
Entire senior management team to be hired effective November 4
OTTAWA, ON, Nov. 4 /CNW/ - Plaintree Systems Inc. (NASD OTC - BB: LANPF;
TSE: LAN), announced today that its agreement with Targa Group has been
substantially amended. Plaintree has obtained the commitment of the two
holders of its Preferred shares (totaling CDN$16 million) to convert those
shares into Common shares at the rate of CDN$1.00 per Common share. Further,
Plaintree announced that the entire senior management team of Targa Group will
be hired by Plaintree effective Thursday November 4.
As planned, Jay Richardson will be resigning as Plaintree's president and
CEO, but will remain on the board of directors. David Watson, president of
Targa, will become Plaintree's new president and CEO.
In other changes to the previously announced transaction:
- Targa will provide a CDN$3 million guarantee to Plaintree and its
unsecured creditors
- The previously announced debenture to be given to the Targa
shareholders amounting to CDN$2.8 million will no longer be provided
- Targa will not amalgamate with Plaintree, as previously agreed -
instead, Plaintree will manage Targa's businesses on a fee for service
basis.
As previously announced, Targa will acquire 49% of the then outstanding
shares of Plaintree.
''This is a tremendous step toward completion of the Targa transaction.
The ability of their management team to join us on short notice is the best
indication of the deep commitment of the Targa team to the success of this
transaction,'' said Jay Richardson. ''The relief from the anticipated $2.8
million debt burden is a major improvement from the standpoint of Plaintree's
shareholders, significantly enhancing Plaintree's available net cash flow. As
well, the proposed fee for service additional revenue stream will considerably
strengthen Plaintree's net revenues.''
The final approval of the agreement remains subject to regulatory
approval.
David Watson said, ''I couldn't be more pleased at how this transaction
is now coming together on a fast track. We look forward to a long future of
profitability in Plaintree.''
About Plaintree Systems
A publicly held company founded in 1988, Plaintree Systems develops and
sells LAN switches, maintaining a reputation for high quality products and
technical support. Headquartered in the Ottawa region, Plaintree also
maintains offices in the US and Europe. Plaintree is publicly traded in the
U.S. on NASDAQ and in Canada on the TSE.
For more information, visit Plaintree's website at
plaintree.com.
%SEDAR: 00001576E
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For further information: Jay Richardson, President & CEO, Plaintree
Systems, Tel: (613) 831-8300, E-mail: jrichardson@plaintree.com; David
Watson, President and CEO, Targa Group Inc., Tel: (613) 727-9876, E-mail:
targa@netcom.ca; Cathy Browne, High Road Communications, Tel:
(613) 236-0909 ext. 302, E-mail: cbrowne@highrd.com |
