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the latest news! write-off debt!! HOMEX - Adelaide
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A syndicate of Australian investors intends to acquire the entire
stake currently owned by WilTel Communications, PowerTel's largest
shareholder, and in addition will finance and underwrite A$16.3
million of new equity for PowerTel and restructure PowerTel's balancesheet.
PowerTel and WilTel have reached an in-principle agreement with The
Roslyndale Syndicate in relation to the following:
* PowerTel will raise A$16.3 million by way of a renounceable rights
issue based on the issue of 1.5 new shares for each currently held
share at an issue price of 1 cent per new share. The issue will be
fully underwritten by The Roslyndale Syndicate.
* WilTel will sell to the Roslyndale Syndicate:
- All its equity stake in PowerTel (including ordinary shares to be
issued upon the conversion of the Converting Preference Shares and
accrued dividend rights currently held by WilTel) totalling
520,117,263 shares. Following conversion, rights to the 10%
cumulative preference shares dividend shall cease.
- All PowerTel debt and accrued interest held by WilTel. The debt of
$21.3 million shall then be converted at 2.42 cents per share into
880,165,289 million ordinary shares. Accrued interest will be writtenoff.
The effect of the above transactions being executed will be that The
Roslyndale Syndicate will hold a 49% stake in PowerTel prior to debt
conversion and 62% post conversion assuming that all rights are taken
up by PowerTel shareholders.
The financing and restructure proposal is conditional on:
* Formal documentation being signed with all parties.
* PowerTel and WilTel banks' approval.
* PowerTel shareholder approval for the acquisition of shares by The
Roslyndale Syndicate and for the conversion of A$21.3 million debt.
Uponcompletion of formal documentation, PowerTel will forward to
shareholders a Notice of an Extraordinary Meeting to be held in early
July 2003 together with accompanying explanatory details and an
independent expert's report to assist shareholders when voting on the
above matters.The Roslyndale Syndicate is a syndicate of leading Australian
investors comprising of Geoffrey Cousins, Trevor Kennedy, Sam Gazal
and others. In conjunction with the new major shareholding, it is
planned that Geoffrey Cousins, Trevor Kennedy, and Sam Gazal will
join the PowerTel Board in replacement of the three WilTel nomineedirectors.
PowerTel owns and operates Australia's third largest
telecommunications network infrastructure dedicated to servicing
corporate, government and service provider customers. In 2002, the
company doubled its revenue to $102 million and reduced its EBITDA
loss to less than $3 million. In the first four months of 2003,
PowerTel has achieved$39 million in revenue and $2.9 million in
EBITDA while signing more than $16 million in new business contracts.
The chairman of PowerTel, Miller Williams, said: "The additional
$16.3 million of funding and the impetus provided by The Roslyndale
Syndicate as a new major shareholder will ensure that PowerTel will
be a secure and growing provider of telecommunications services intothe future."
Downtown Utilities, PowerTel's second largest shareholder, supports
the refinancing and is confident that it will enable PowerTel to
capitalise on its proven business plan and continue to achieve
significant growth.
Stephen Butler, PowerTel's chief executive officer said: "This
strengthening of PowerTel's balance sheet will reassure all existing
and prospective customers that the company will remain a significant
competitor in the Australian telecommunications industry. Further
growth will result from our ability to use our own fibre network to
provide voice and data services and from our access to over 600 major
CBD office buildings in Sydney, Melbourne and Brisbane. This access
will be expanded in 2003 through the deployment of low cost DSLinfrastructure."
Mr Geoffrey Cousins on behalf of Roslyndale said: "The Roslyndale
Syndicate is pleased to be able to participate in and support
PowerTel's successful and proven business plan. We expect to be able
to enhance PowerTel's growth opportunities through the experience and
expertise of the investors that make up the syndicate."
For more information about PowerTel, please visit our website at:
www.powertel.com.au Media Contact: Brian Mahoney, FCR, 02-9235-1666
Investor Contact: Stephen Butler, CHIEF EXECUTIVE OFFICER,02-8264-3888