Here is good news posted at TSI's web site. I think we have definitely passed through the bottom of the 1999 downtrend, and from now on the price should head higher. Good luck to all long term holders.
John
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( BW)(MD-TSI-TELSYS)(TSI.) TSI TelSys Issues Non-Convertible, Non-Retractable Preferred
Shares to Replace US$5.0 Million Debt Obligation
Business Editors/Hi-Tech Writers
COLUMBIA, Md.--(BUSINESS WIRE)--Jan. 4, 2000--Montreal Exchange "TSI" - TSI TelSys Corporation
announced today that it has executed a share purchase agreement with Arab-Malaysian Bank Berhad, Abrar Group
International Sdn. Bhd. and its operating subsidiary, TSI TelSys, Inc., that has the effect of converting TSI TelSys, Inc.'s US$5.0 million debt obligation plus accrued interest of $0.3 million into non-convertible, non-retractable preferred shares in the Company.
The Company has agreed to issue 1,067,370 senior preferred shares to Arab-Malaysian Bank at the issue price of US$5.00 per share for an aggregate issue size of US$5.3 million in exchange for the debt obligation of its subsidiary and a release by both Arab-Malaysian Bank and Abrar Group International Sdn. Bhd. of any claims on the Company and its subsidiary arising from the US$5.0 million payment made by Arab-Malaysian Bank Berhad to First Union National Bank in August 1998.
Paul Sevigny, C.F.A., the Company's Chief Financial Officer, said, "The conversion of the US$5.0 million debt
obligation into preferred shares represents a major transformation of our balance sheet. On a proforma basis, the Company's consolidated balance sheet at the end of the third quarter of FY1999 would now shows zero debt, positive
stockholders' equity of US$2.5 million and positive working capital (current assets minus current liabilities) of US$1.7
million."
As announced in the Company's press release dated August 6, 1998, the US$5.0 million debt obligation arose in August
1998 after First Union National Bank issued a demand to TSI TelSys, Inc., and to the Company, as guarantor, for early
repayment of TSI TelSys, Inc.'s three-year US$5.0 million commercial promissory note.
First Union had indicated that it was concerned that the quality of the collateral securing its loan to TSI TelSys, Inc. was deteriorating. The collateral for the loan had been a standby letter of credit issued by Arab-Malaysian Bank Berhad, which had been facilitated by Abrar Group International Sdn. Bhd., the Company's largest shareholder.
As announced in the Company's press release dated August 21, 1998, First Union National Bank subsequently received
full payment of the principal of US$5.0 million from Arab-Malaysian Bank Berhad of Malaysia, which had the effect of transferring the ownership of the US$5.0 million debt obligation owing by TSI TelSys, Inc. to Malaysian hands.
Mr. Sevigny added, "The new preferred shares will be entitled to a cumulative gross dividend payable yearly, to be initially set at 8% per annum, commencing April 1, 2000 for three years and thereafter payable quarterly. The dividend yield is adjustable from 8% to 12% depending on the amount of preferred shares outstanding. The Company has the option of redeeming all or any of the preferred shares at US$5.00 per share plus accrued and unpaid dividends; the holder of the preferred shares does not have the option to require the Company to retract any or all of the preferred shares. The preferred shares carry no voting rights and have no conversion rights into common shares. Consequently, the issue results in no dilution for holders of common shares." |
