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SelectCore Signs Deal to Sell Prepaid Telecom Assets for $6.67 Million
|By Marketwired .
|July 16, 2014 08:35 PM EDT
TORONTO, ONTARIO -- (Marketwired) -- 07/16/14 -- SelectCore Ltd. ("SelectCore" or the "Company") (TSX VENTURE: SCG), Canada's Leading Payments Organization, is pleased to announce that it has signed a binding term sheet with Investel Capital Corp. to sell its legacy prepaid telecommunication assets. The total value of the transaction is approximately $6,669,064 including a combination of assumption of debt ($4,308,071), and cash, inventory and accounts receivables ($2,360,993).
The assets being sold represent the Company's prepaid telecom switching, long distance and Canadian and US mobile airtime distribution businesses.
Under the terms of the binding term sheet, SelectCore will have continued access to the retail distribution channels and a royalty-free, perpetual license of its prepaid telecom technology platforms - both of which will continue to augment the Company's financial services business.
The structure of the asset sale ensures that SelectCore will retain all carry-forward tax losses in excess of $15M which will result in greater future earnings per share.
SelectCore's Management and Board of Directors believe that the divesture of these non-core telecom assets is in the best interest of the Company. In addition to realizing a significant improvement to the Company's balance sheet, SelectCore can now focus solely on growing its high-margin financial services business.
"The strategic merit of this transaction is to allow SelectCore to concentrate on its core financial services business while restoring shareholder value," commented Keith McKenzie, President of SelectCore. "The significant improvement to our financial position will allow us to execute on new opportunities and harness the Company's full potential."
Shareholders are being asked to vote in favour of this transaction via proxy prior to the Company's Annual General Meeting and Special Meeting to be held on August 8th, 2014. The transaction is also subject to regulatory approval. The sale is expected to close on or before August 15th, 2014.
SelectCore Ltd. (TSX VENTURE: SCG) is a pioneer and leader in alternative prepaid payment solutions for underserved markets. Founded in 1999, the Company offers a range of prepaid products and services that provide financial empowerment to a market of millions of under-banked consumers. SelectCore has been recognized as one of Canada's Fastest-Growing Companies by Profit100, North America's Fastest-Growing Technology companies by Deloitte Fast500, Canada's Top Tech Companies by Branham300 and Canada's Leading Payments Organization by Payments Exchange.
About Investel Capital Corporation:
Investel Capital Corporation is an investment fund specializing in the acquisition of telecommunications companies. With offices in Toronto and Vancouver, Canada, it focuses on investing in both distressed and underachieving telecom companies that have recurring revenue but low profitability. Once integrated into Investel's group, companies will have immediate access to its comprehensive network resources and infrastructures such as administration, engineering, customer support, network operations, etc. In this way, redundant expenses such as operational and network costs can be eliminated, thereby reducing cost and increasing revenue.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including risks related to the regulatory approval process, market and financing conditions as well as risks associated with the prepaid telecom and prepaid financial industries, changes in project parameters as plans continue to be refined as well as those risk factors discussed in the Company's management's discussion and analysis for most recent financial reporting period, available on www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information contained herein, except in accordance with applicable securities laws.
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