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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude -- Ignore unavailable to you. Want to Upgrade?

To: Upstock who wrote (18382)	6/11/1998 1:00:00 PM
From: Doug R	Read Replies (1) \| Respond to of 79281

Al, A piece of the telecom action in Africa? Hmmm. Sounds promising. The opportunity seems to outweigh the issuance of shares. I think ELGT has placed themselves into the category of a long term winner. Here's the release for those interested: Electric & Gas Technology, Inc. Agrees to Acquire Telecommunications Company DALLAS, June 11 /PRNewswire/ -- Electric & Gas Technology, Inc. (Nasdaq: ELGT) announced today execution of an agreement for a major acquisition and diversification into the telecommunication industry. The transaction is based on an exchange of newly issued ELGT common stock with an initial issuance of 4.5 million shares of ELGT stock subject to shareholders' approval, and a three-year program of additional common stock based on certain milestones of sales. ELGT's entry into the telecommunication industry will be accomplished through the acquisition of 100% of the outstanding stock of African Telecommunications, Inc. (AfriTel). AfriTel holds valuable licenses for installation and operation of wireless cellular telephone systems in the Democratic Republic of Congo and Ghana and is in the process of pursuing licenses in other Central and West African markets. In such countries the supply of reliable telephone service is very limited. Poor quality and high cost of telecommunications plague not only individuals but the government and multinational business operations as well. AfriTel's mission is to bring high quality, cost effective telecommunications to the last underdeveloped market for these services. AfriTel represented to ELGT that it has approximately $10 million in total assets with stockholders' equity of approximately $6.5 million with convertible debt of approximately $3.5 million. ELGT elected to accept AfriTel as a more beneficial acquisition than the previous Cosmos /Gateway transaction. AfriTel plans to pursue additional Telecom acquisitions. AfriTel was formed in 1997 with a mission to acquire and develop wireless telecommunications concessions in Sub-Saharan Africa. Roger Blott, CEO of AfriTel, said, "Africa represents one of the most attractive investment areas for emerging market telecommunications, combining high growth prospects and high margin businesses. With most Sub-Saharan markets having below 1% telephone penetration there is huge pent-up demand. Approaching this market with wireless technology means that we can deploy quickly and economically the network to tap this market, and we can position ourselves to work jointly with the satellite (LEO) operators to give a full coverage in the territories in which we are licensed. As a result the licenses obtained by AfriTel are highly valuable." AfriTel's first license is a nationwide wireless local loop license for the Democratic Republic of Congo using PCS frequencies at 1800-1900 MHZ. In Ghana, AfriTel has obtained a wireless data license. In both cases, the operating businesses will be permitted to carry their own international traffic. To develop the network in the Democratic Republic of Congo and elsewhere in the region, AfriTel has signed a $70 million supply contract with Qualcomm Inc. of San Diego (Nasdaq: QCOM) for terminal units and infrastructure based on PCS/CDAMA technology. Qualcomm, based in San Diego, is a major supplier of cellular telecommunication systems. AfriTel's contract calls for up to six cellular systems to be deployed in the Democratic Republic of Congo. AfriTel further advises that Qualcomm has signed a Letter of Intent to provide the equipment financing for this contract. The first system, already designed and procured, is scheduled to be installed in the capital, Kinshasa, and operational in September this year. "Our relationship with Qualcomm has been crucial in putting together the strategy for AfriTel," said Blott. "We have formed, therein, an excellent partner sharing our view of the opportunities in the African market." In a previous press announcement, John Major, president of Qualcomm's Wireless Infrastructure Division, said, "Our relationship with AfriTel has a strategic vision. Qualcomm and AfriTel will be using CDMA wireless local loop to assist in the reconstruction and development of the Democratic Republic of Congo, a country with over 46 million people and a low telephone penetration. Qualcomm looks forward to working with AfriTel to improve the availability and quality of telephone service to both residential and business customers in the Congo." AfriTel management is confident of strong growth for its operating businesses. ELGT agreed to further issues of ELGT shares based on AfriTel's sales growth over the next three years. These performance milestones require AfriTel to achieve quarterly revenue targets in each of the next three calendar years based on annual $25 million revenue in 1999, $5O million in 2000 and $80 million in 2001. Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including timely product development and commercial implementation of the Company's products, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended July 31, 1997 and most recent Form 1O-Q. SOURCE Electric & Gas Technology, Inc. CO: Electric & Gas Technology, Inc.; African Telecommunications, Inc.; Qualcomm Inc. ST: Texas, Democratic Republic of Congo, Ghana IN: TLS UTI SU: TNM 06/11/98 12:17 EDT prnewswire.com