TeleClone Inc -
Teleclone faces its demise as Nortel loan called in
TCL
Shares issued 7,250,000
1999-12-09 close $4.95
Friday Dec 10 1999
Also Nortel Networks Corp (NTL)
Mr. Ed Collins reports
Based on the closing prices of common shares of BCE Inc. and Nortel Networks Corp., Teleclone still
does not meet its margin requirements under a stock lending agreement pursuant to which it has
borrowed 5,250,976 common shares of Nortel. The terms of the stock loan require that TeleClone
maintain a minimum margin of at least 105 per cent of the value of the common shares of Nortel
borrowed under the stock loan. Based on the closing prices of BCE common shares and Nortel common
shares on Dec. 8, 9, and 10, 1999, TeleClone did not meet those margin requirements. Under the terms
of the stock loan, the stock lender gave notice on Dec. 9, and 10, 1999 that TeleClone failed to meet its
margin requirements on Dec. 8, and 9, 1999. Since the market value of the common shares of BCE
pledged as security under the stock loan at the close of business on Dec. 10, 1999, was not above the
minimum margin requirement, TeleClone will be required to deliver additional collateral as margin to
meet its margin requirements by the close of business on Dec. 13, 1999. If TeleClone does not deliver
additional collateral by this time, it will be in default under the stock loan. TeleClone does not have any
additional assets to pledge as collateral under the stock loan. If TeleClone defaults under the stock loan,
the stock lender will be entitled to terminate the stock loan and take steps to realize on its security, which
action would require the wind-up of the company.
TeleClone is a financial holding company created to hold common shares of BCE, to allow holders of
TeleClone's Class T shares to benefit from any capital appreciation in BCE common shares, apart from
appreciation attributable to common shares of Nortel held by BCE. TeleClone's Class T shares are listed
on the Toronto Stock Exchange and the Montreal Exchange and trade under the symbol TCL.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com |
