CANCALL CELLULAR COMMUNICATIONS INC - Sells Pre-paid Division
Market News Publishing, Wednesday, April 16, 1997 at 22:12
Robert Kamyszek, Chief Administrative Officer and Director of Cancall
Cellular Communications Inc., is pleased to announce that the Company 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.
TEL: 1-800-557-2485 Robert Kamyszek, Chief Administrative Officer
1-619-752-9988 and Director
FAX: 1-619-752-9989 |
