Zi Signs Letter of Intent to Sell Its VoIP and Bluetooth Business Unit; Zi Shareholders Anticipated to be Issued Interest
BUSINESS WIRE - July 01, 2002 08:31
CALGARY, Alberta, Jul 1, 2002 (BUSINESS WIRE) -- Zi Corporation (NASDAQ:ZICA) (TSX:ZIC), a leading provider of intelligent interface solutions, today announced that it has signed a letter of intent to sell all of its interest in its Hong Kong based telecom technology unit, also known as Zi Services, to an Over-the-Counter Bulletin Board traded company (the "Purchaser"). The common shares of the Purchaser, as consideration for the sale, are anticipated to be distributed to Zi shareholders subject to legal, regulatory, tax and other considerations.
Completion of the transaction is subject to a number of conditions, including completion of definitive documentation, any required shareholder approval, exchange approval, regulatory clearances and due diligence.
"Zi has invested over $5 million in the Zi Services unit and the development of its technologies, and we believe that further investment will be required as the market for these technologies develop. This transaction is expected to eliminate the impact of these costs on our operating results and, together with our previously announced transaction related to our e-learning investment, to position Zi to improve its prospects for profitability," said Michael Lobsinger, Chairman and Chief Executive Officer of Zi Corporation.
"Subject to legal, regulatory, tax and other considerations, we intend to structure the transaction to allow our shareholders to receive an interest in the Purchaser," continued Lobsinger. "We believe that the sale of the Zi Services unit, if completed, will offer Zi shareholders the best of both worlds by preserving the upside potential of the future growth in VoIP and Bluetooth, while optimizing the near term profitability and capital strength of Zi Corporation." |
