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To: SSP who wrote (7370)	8/17/1999 10:41:00 AM
From: Link Lady	Read Replies (1) \| Respond to of 150070

canoe.com Look up company symbol FP Home Hot Stock Insider Trading Personal Finance REIT Report CEO of the Year Money News Oil & Gas News Growth Stocks Technology News Columnists Company Meetings Markets Snapshot World Watch Mutual Fund News For Tuesday, August 17, 1999 Plaintree says it has lifesaver Deal with Targa By JILL VARDY The Financial Post OTTAWA - Plaintree Systems Inc. says it has found a partner to help save it. All it needs now is approval from its biggest shareholders. Plaintree announced yesterday it has signed an amalgamation agreement with Targa Group Inc., a private company that makes electronic equipment for the aerospace sector. Plaintree, which has been struggling to survive since last year in the face of huge losses and slow sales of its telecommunications switching equipment, will assume control of Targa's business in exchange for 49% of Plaintree's shares. "This is what we've really been working for... if we can get an agreement in place we have the prospect of a much stronger Plaintree going into the future," said Jay Richardson, Plaintree's president and CEO, who will cede his job to David Watson, CEO of Targa Group, if the transaction is approved. Mr. Richardson will remain on Plaintree's board of directors. The deal hinges on the approval of two large Plaintree preferred shareholders; Nortel Networks Ltd. and Acktion Corp., a Toronto financial company. Both hold huge blocks of preferred shares in the company which will be converted to common shares under the terms of the deal with Targa. Mr. Richardson said he hasn't heard if either shareholder will approve the deal. "I hope we will have their support in a transaction that clearly has a much better prospect than the alternative," he said. "If we had achieved no transaction you'd have to question whether we could have continued on a stand-alone basis." The company, founded in 1988, has never reported an annual profit. It was delisted by Nasdaq in early April because the share price dipped below the minimum level required to maintain its listing. It still continues to trade, though, on the Toronto Stock Exchange and on the over the counter market in the U.S. The stock closed yesterday at 34c, up 17c. Mr. Richardson said Plaintree will report its first quarter, 2000 results today as well as its results for the year ended March 31, 1999. "The picture has improved substantially," he said. "Plaintree has gone from a burn rate of $20-million a year to the first quarter being, on a cash basis, basically break-even." The company's losses have been reduced "substantially," he added. Its employee count, which was at 120 in 1998, is now under 30. He said those employees will remain with the company as it merges with Targa. Mr. Richardson said he hopes shareholders will be asked to approve the merger at Plaintree's annual shareholders meeting Sept. 29. If the proxy information cannot be printed and sent to shareholders by that time, the special meeting to hold the merger vote will be held in October.