News Releases
Stratos Global Corporation Partners with NewTel Enterprises Limited To Raise CDN $150 Million of Fin
Stratos Global Corporation (TSE: SGB) and NewTel Enterprises Inc. (TSE:NEL) announced today that NewTel will invest CDN $48 million, through a private placement of common equity and a common share warrant, into Stratos Global Corporation, subject to approval by governmental authorities. NewTel's significant equity investment has not only positioned the company for significant growth but also allowed Stratos to access attractive debt finance opportunities. With this strong financial support, Stratos Global will move to complete a number of pending acquisitions and seek out new opportunities.
"With the strong support of NewTel we have positioned Stratos to execute its acquisition growth plans," said Derrick Rowe, Chairman and CEO of Stratos Global. Derrick Rowe also holds the position of President and CEO of Stratos Wireless, and will continue to do so. NewTel purchased 2 million common shares from Stratos Global at $5.00 per share, as well as a CDN $38 million warrant excercisable, upon satisfaction of certain conditions, into 7.6 million Stratos Global common shares at an exchange ratio of $5.00 per share. The warrant will be exercisable upon the entering into of a definitive agreement for an acquisition that is currently being negotiated by the company. NewTel will also exchange a portion of their common shares in Stratos Wireless Inc., a subsidiary of Stratos Global, for common shares in Stratos Global. This will increase the outstanding common shares in Stratos Global to 22.5 million. Following the exercise of the warrant and the satisfaction of other conditions (including applicable regulatory approvals) NewTel will be the majority shareholder of Stratos Global and Stratos Global's interest in Stratos Wireless Inc. will increase to 71%. Stratos has also reached an agreement in principle to acquire all the remaining outstanding shares of Stratos Wireless from the other shareholders. Stratos Global will then hold 100% of Stratos Wireless. These transactions are subject to final documentation, regulatory and respective Board approvals. Additionally, a credit facility of CDN $105 million of bridge financing is being arranged with a banking syndicate led by Royal Bank of Canada to fund Stratos Global's acquisition plans. These funds are likely to be refinanced with a public debt issue within the year.
"The acquisition war chest of approximately $150 million established today is expected to be utilized within the coming year. The Company will continue to aggressively investigate and pursue acquisition opportunities," stated Derek Woods, President of Stratos Global Corp.
Stratos Global Corporation and its subsidiaries offer a diverse portfolio of mobile satellite services to customers in a variety of industries. The Stratos companies include Stratos Wireless, Stratos Mobile Networks, Stratos Network Research, IDB Mobile and Stratos Mobile Networks (USA) LLC.
For additional information :
Doug Gunster
Manager, Communications
301-968-1954
doug.gunster@stratosglobal.com
