News today on Communicorp (CUC-T) re: financing and buyout :
NEWS RELEASE TRANSMITTED BY CCN NEWSWIRE - A SERVICE OF ITG
FOR: COMMUNICORP CORPORATION
TSE SYMBOL: CUC
MARCH 7, 2001 - 17:17 EST
Communicorp Announces $1 Million Financing And US
Investor Acquires 44% Of Company Shares From Principal
Shareholders
TORONTO, ONTARIO--Communicorp Corporation (CUC:TSE) today
announced that, subject to regulatory approval, it will complete a
$CDN 1 million secured convertible subordinated debenture
financing through New York-based investment group, TradeCo Global
Securities, Inc. (TradeCo). The debentures mature in three years
and are convertible at the holders' option into the Corporation's
common shares on the basis of 2,501 common shares for each $US
1,000 principal amount of debenture (being a conversion price of
approximately $ 0.62 per share).
As part of the financing, Communicorp will issue to the investors
approximately 657,000 warrants to purchase common shares of the
Corporation for a period of five years at a price of $0.72 per
share.
Net proceeds from this financing will be used to fund marketing
activities, repay certain indebtedness, purchase equipment and for
general corporate purposes.
In addition to this financing, Messrs. Eugene Karadjian and Donald
Gill, have agreed, subject to banker and regulatory approval, to
sell to one of the investors to the debentures 4,017,824 common
shares currently owned by them, representing approximately 44% of
the Company's common shares currently outstanding. After the
sale, Mr. Karadjian will continue to hold 1 million of the
Company's common shares.
TradeCo Global Securities, Inc., is an affiliate of the Geometry
Group. The Geometry Group is a New York based investment
management holding company with approximately US$ 2 billion of
assets under management.
After the closing of these transactions, the new investor group
and TradeCo Global Securities, Inc., will be offered two board
seats.
Mr. Eugene Karadjian, Chairman of the Board, will remain as part
of the senior management. He said "We are entering a challenging
business environment where it is important to have strong
financial partners, and we are encouraged that these investors see
the tremendous opportunity with respect to our Company. They will
help Communicorp speed up its expansion plan particularly into the
US market where it has only scratched the surface to date."
Mr. Harvey Wortsman, presently President and Chief Operating
Officer, will become the new Chief Executive Officer of the
Company. Mr. Wortsman notes, "the US based investors will provide
not only a strong financial commitment but will aid in marketing
and business acumen required to broaden our North American base;
and with Mr. Karadjian maintaining a significant stake in the
Company, while remaining to help in the Company's growth, is very
positive for the Company. The Company's shareholders should be
excited about Communicorp's prospects for our future."
The Communicorp group of companies are in the graphic
communications business and offer a wide array of services,
including digital imaging, graphic pre-media facilities, new media
capabilities including web design, marketing and promotional and
printing capabilities. Technologically advanced, the group is
strategically focused on Digital Asset Management to provide large
and small corporate clients with one-stop shopping for all their
communications needs.
Forward-looking statements are subject to change based on various
important factors including, among others, competitive actions in
the marketplace.
The Company's shares trade on the Toronto Stock Exchange under the
symbol CUC. There are currently 9,145,424 common shares
outstanding. |
