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Gold/Mining/Energy : American Gem (GEM) -- Ignore unavailable to you. Want to Upgrade?

To: Dark_Continent who wrote (388)	6/29/1999 9:08:00 AM
From: MrsNose	Read Replies (1) \| Respond to of 464

Tuesday June 29, 8:57 am Eastern Time Company Press Release American Gem Corporation Agreement to Acquire Romspen Investment Corporation TORONTO, ONTARIO--American Gem Corporation (''American Gem'') today announced that it has entered into an agreement to acquire all the issued and outstanding shares of Romspen Investment Corporation (''Romspen''), a successful mortgage investment company. Romspen currently administers a portfolio exceeding $50 million in commercial mortgages. American Gem intends to evolve Romspen's traditional commercial mortgage business into an Internet business for the sale of mortgages online. ''The Internet will change the mortgage business substantially'' said Nadir Desai, incoming Chairman and Chief Executive Officer of American Gem, ''we see a large business opportunity offering mortgages online to investors seeking higher yields than traditional fixed income returns.'' Vic Alboini, President of American Gem, added: ''The principals of Romspen led by Sheldon Esbin have developed a very professional traditional mortgage business. Mr. Esbin will work closely with American Gem to create a sophisticated Internet site enabling borrowers and lenders to conduct mortgage transactions online. Along with our previously announced online brokerage businesses, this proposed acquisition represents another building block in the array of online financial services provided to investors and small to mid-sized businesses.'' Sheldon Esbin said, ''The mortgage market in Canada is ripe for change through online sales and we want to lead this change. There is the opportunity in Canada to establish a brand name commercial mortgage lender. The online opportunities best facilitate this potential and could expand our traditional business to very significant levels.'' The principals of Romspen have been in the mortgage financing business for the last 20 years and will be joining American Gem following the acquisition. Romspen has been successful in servicing smaller commercial borrowers whose mortgage financing needs are not being met by traditional financial institutions. Romspen has developed a network of private investors who invest in commercial mortgages and achieve a high rate of return. Romspen's loans range from $500,000 to $2,500,000. American Gem believes that the commercial mortgage business is a solid niche business which is underserved by traditional financial institutions. With the disappearance of many trust companies, the consolidation of other financial institutions, the possible merger of the chartered banks and the lack of interest by financial institutions in smaller commercial mortgage loans, there is a tremendous need for the commercial mortgage market to be served properly and efficiently. American Gem has agreed to pay a total of $4,000,000 in cash and common shares. American Gem may also be required to issue up to a maximum aggregate of $1,000,000 in additional common shares at prevailing market prices for such common shares in 2001 or 2002 if certain higher revenue levels are achieved for the Romspen mortgage business. The proposed acquisition of Romspen is subject to various conditions including the execution of definitive agreements, due diligence and regulatory approvals. American Gem is a diversified e-commerce solutions company focused on small to medium-sized businesses through online financial services and online retailing.