CONS. CAPITAL OFFERS TO EXCHANGE DEBT, PREFERRED STK FOR COMMON
(The following is a reformatted version of a press release issued by
Consolidated Capital of North America, Inc.)
Consolidated Capital of North America, Inc. Announces Exchange Offer of Common
Stock for Debt and Acquisition Strategy.
Denver, December 1, 1999. Consolidated Capital of North America, Inc.
(OTCBB: CDNO) announced today that its Board of Directors has authorized a
private offer to its creditors to exchange its outstanding parent-company debt,
preferred stock and other payables of up to $15 million for shares of its common
stock at an exchange price of two cents ($.02) per share. These shares will
bear restrictive legends pursuant to Rule 144, which in most cases requires a
one year holding period before the shares will be freely transferable pursuant
to such Rule.
In light of the fact that the Company's three operating subsidiaries are in
liquidation and the Company had ceased operations earlier this year, the Company
believes that the most likely prospect for the Company's financial revival at
this time is to negotiate the acquisition of the Company by, or other
combination of the Company with, a private business that desires to become
publicly traded in the U.S. securities markets. However, this strategy will
only succeed if the Company is free of any significant contingent liabilities
such as litigation, claims or material creditors that have not reached agreement
with the Company to exchange their debt obligations for equity in the Company.
Management of the Company has developed such an opportunity with a newly
organized United Kingdom based internet/telecommunications company, to be called
"European e Commerce" Limited ("EEC"). The Company's Board of Directors has
authorized the execution of a preliminary, non-binding letter of intent relating
to such transaction. However, there is no certainty at this time that this
acquisition will be successfully completed. The consummation of the proposed
acquisition will be subject to several material conditions precedent, which will
have to occur to the satisfaction of EEC. These include, but are not limited
to, the negotiation of a definitive acquisition agreement, the Company being
free of all material debts, a due diligence investigation by EEC with no
material issues discovered, the raising of in excess of $10,000,000 in new
investment capital by the Company, and the obtaining of necessary waivers and
consents from third parties, including the Company's shareholders. It is
anticipated that a meeting of shareholders will be required to approve certain
aspects of the proposed transaction if a definitive acquisition agreement is
negotiated between the parties. Further, it is anticipated that an affiliate of
management of the Company will be compensated by EEC or the Company if the
transaction is successfully completed.
Statements made in this press release may constitute forward-looking
statements and are subject to numerous risks and uncertainties, including the
failure to successfully complete the exchange offer or the acquisition, the
Company's future capital needs, the Company's ability to prevail in litigation,
the Company's ability to obtain additional funding and required regulatory
approval, the development of competitive businesses by other companies, and
other risks detailed from time to time in the Company's filings with the
Securities and Exchange Commission. Therefore, the actual results of the
Company's efforts may differ materially from those described in this press
release.
Contact: Richard Bailey, President, (310) 265-4404.
(bj) PN
-END-
-0- (CRL) Dec/01/1999 16:07 |
