Golf/Sienna Broadcasting Prepping LEC Leasing Division for Spin-off; Golf/Sienna shareholders Will Receive LEC 'Gratuity' Shares
SPRINGDALE, Ark., July 9 /PRNewswire-FirstCall/ -- Golf Entertainment, Inc. (OTC Bulletin Board: GECC) dba Sienna Broadcasting has obtained Board approval to commence spinning-off its wholly owned subsidiary, LEC Leasing, Inc. According to Company officials, the process will commence with delivery to all existing Golf/Sienna shareholders of record, of one share of LEC Leasing restricted common stock for each share of Golf/Sienna common or preferred that was owned as of the close of market, July 8, 2002. The process will result in the issuance of approximately 7-million shares of restricted LEC common stock, according to Company officials.
Dr. Tim Brooker, Golf's CEO and Board Chairman said that the gratuity shares will be issued to shareholders of record with documented Golf stock ownership, but the program will, by mutual agreement, exclude an anticipated large-block shareholder that recently inked a deal to purchase 10-million shares of Golf's common stock for $5.02 million dollars. LEC Leasing is expected to form a separate Board of Directors in the next 90 days, and structure itself so that all of its operations meet Nasdaq SmallCap company guidelines for corporate governance and audit standards. Initially, LEC Leasing shares will be illiquid and not trade in any public market.
LEC Leasing, Inc., was once the flagship operation of Golf's family of companies. During its peak performance years of operation in the 1990s, Brooker said the Company achieved impressive annual revenues in the range of $30 to $35 million dollars annually. "In 1999, the Company decided to sell its entire lease portfolio to Somerset Capital, retire several multi-million dollars lines of credit and pursue other business alternatives."
Following the sell-off of the leasing portfolio, LEC remained inactive until earlier this year when 20-year Company veteran Michael F. Daniels was brought back to the Company, first as an outside director and later as President of the reactivated LEC Leasing division.
Daniels, who led the leasing company during the mid-90s, has recently been actively preparing the leasing division to return to normal operations. "With the exception of a few corporate legal housekeeping items, we're ready to resume operation as of now," Daniels commented. "We're returning to the business as a smaller, more aggressive operation. Our new focus will be in leasing big-ticket broadcast television equipment to companies under the gun to achieve FCC mandated digital broadcasting capability."
A market survey conducted by the Company earlier in the year showed an apparent lack of leasing and financial institutions that can deal with smaller market TV stations who are suitable candidates for leasing. "We want that business," said Daniels.
FCC regulations mandate that all full-power television stations convert their current analog stations to digital stations in this decade. Although the majority of stations are complying, many are not able to meet current FCC requirements. Daniels says that financing has been a problem with the station owners he has contacted in the last month.
Brooker said the spin-off process of LEC is not likely to result in an IPO for LEC Leasing. "We have pretty much decided to use the private placement process to raise the $10 million dollars we feel LEC will need in order to have its own internal warehouse line. Golf shareholders already own LEC. What we're announcing today is the first step in LEC becoming independent. We anticipate that a year from now, Golf/Sienna will be a minority shareholder in LEC."
SOURCE Golf Entertainment, Inc.
CONTACT: David Duncan of Golf/Sienna Broadcasting, (479) 751-2300 |
