News Alert from PR Newswire via Quote.com
Topic: Cancall Cellular Communications Inc.
Quote.com News Item #2505617
Headline: Cancall Sells Pre-Paid Division
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HOPE THIS DEAL BENEFITS US STOCK HOLDERS!
VANCOUVER, April 16 /CNW-PRN/ - Cancall is pleased to announce that it
has entered into a multifaceted agreement dated April 13, 1997, with Novacom
Inc. of Los Angeles Calif., an integrated telecommunications provider.
Novacom specializes in the marketing and distribution of cellular products on
a nationwide basis.
Novacom has agreed to purchase all of Cancall's pre-paid phone business
including all existing equipment, contracts and revenue stream. Novacom will
purchase the division for a price of $1.37 million Canadian dollars. The
price will be divided into a cash component of $342,000 cdn for existing
pre-paid equipment, airtime card inventory and revenue stream from existing
pre-paid users and $1,027,000 cdn in Novacom par value preferred shares for
the existing debit phone distribution contracts and goodwill. The agreement
is subject to VSE approval.
Novacom has also agreed to purchase 3 million cellular airtime minutes
from Cancall at a price of $0.33 per minute. Novacom has agreed to utilize
the 3 million minutes within 6 months from the time of first airtime takedown.
Cancall and Novacom will now provide pre-paid cellular phones and calling
cards to the millions of people, the credit challenged, that the mainstream
carriers refuse service to each year. Cancall will provide the use of their
existing locations and sell airtime to Novacom at competitive prices. Novacom
will be responsible for all marketing, distribution and support for their
pre-paid program. The program will begin initially in all areas where Cancall
and Novacom have operations.
Cancall feels that the arrangement with Novacom is extremely
advantageous, as it will allow Cancall to continue to receive significant
benefits from the pre-paid rental program. This agreement will also eliminate
the initial equipment costs and large marketing expenses associated with
product introduction and market penetration that have previously hampered
Cancall. Novacom management will also provide general telecommunications
consulting services to Cancall to further enhance the relationship.
ON BEHALF OF THE COMPANY: Robert Kamyszek, Chief Administrative Officer
and Director
The Vancouver Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or content of this News Release
SOURCE: Cancall Cellular Communications
-0- 04/16/97
/CONTACT: Shareholder Information 1-800-557-2485 or 1-619-752-9988 or
Fax 1-619-752-9989/ |
