Greyvest Capital Inc. Reports on 1998 First Quarter Results
TORONTO, ONTARIO--On March 31, 1998, Greyvest Capital sold its
U.S. computer leasing operations(Greyvest U.S. Inc. and its
subsidiaries, Princeton Credit Corporation and Frank Orlando Jr. &
Co., Inc.) to Meridian Leasing Corporation. The transaction
closed on March 31, 1998 subject to post-closing adjustments to be
finalized over the next 90 days. Approximately $260 million in
assets were sold and the proceeds were used to reduce debt. Total
debt after the sale was reduced to $73.2 million, of which $3.6
million was non-recourse.
The sale was the result of decisions made by the Greyvest Board of
Directors to evaluate all the assets and operations of the Company
with the purpose of preserving and enhancing shareholder value. A
special committee comprising board members and representatives of
the Company's three largest shareholders has been established to
review this process which will continue in 1998. Greyvest's
management intends to sell, refinance, and reorganize assets and
operations to maximize value. If the assets and operations are
unable to produce a satisfactory return, they will be sold to
repay bank debt and other liabilities. Any residual proceeds will
ultimately be distributed to shareholders.
As a conservative financial measure, Greyvest's management decided
to take a non-cash write-off of goodwill of $6.8 million during
the first quarter of 1998. A portion of the goodwill write-off
will be applied to expected losses from the sale of the U.S.
leasing companies. The balance will become a provision used to
cover any potential future losses and costs incurred during the
sale or restructuring of the remaining companies and assets.
Greyvest Capital Inc. reported revenues of $40.9 million for the
three months ended March 31, 1998 up 50 percent from revenues of
$27.2 million for the comparable period in 1997.
Earnings before tax and the write-off of goodwill for the first
quarter ended March 31, 1998 rose to $1.5 million versus $637,000
for the first quarter of 1997. Due to the write-off of goodwill,
net earnings declined to a loss of $6.1 million or ($0.29) per
share in 1998 versus a profit of $816,000 or $0.04 per share in
1997.
Greyvest Capital has offered to extend the convertible debentures
due June 30, 1998 until June 30, 2000. If current debenture
holders do not wish to extend, Greyvest Inc., the controlling
shareholder, has agreed to purchase and extend all the existing
convertible debentures until June 30, 2000.
Greyvest Capital Inc. is a leading computer rental and leasing
company serving corporate clients, systems integrators and
equipment resellers from offices across Canada and in the United
States.
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FOR FURTHER INFORMATION PLEASE CONTACT:
Greyvest Capital Inc.
Lou Elmaleh
Chairman, President and Chief Executive Officer
(416) 366-1513
or
Greyvest Capital Inc.
Stuart Mooney
President and Chief Operating Officer
(416) 366-1513 |
