MONTREAL – Broadcast services network provider AldeaVision, Montreal, announced an infusion of capital, a corporate re-organization and a new line of business.
The company has entered into an agreement with VGS Capital Ltd., an Alberta based corporation, to recapitalize and reorganize the company’s business. The agreement will provide AldeaVision with a capital injection of $2.97 million, before transaction expenses. Completion of the transaction is expected to occur in September 2006.
"This is a very positive development for our company. This transaction will greatly enhance AldeaVision’s financial position as we continue the development of our strategic business plan." said Lionel Bentolila, president & CEO, in the press release. "Although a corporate reorganization is involved, we expect the process to be completely transparent from a business point of view and not to impact operations with customer, suppliers, and business partners."
The Montreal-based company is a provider of broadcast quality video services and solutions for the television, film and media industries. AldeaVision provides end-to-end worldwide transmissions services using fiber and satellite facilities. The company also operates the first pan-American fully automated fiber-based network for broadcast services with points-of-service in 15 cities and nine countries: Miami, New York, Washington D.C, Los Angeles, Boston, Toronto, Montreal, Mexico City, Guadalajara (Mexico), Lima (Peru), Caracas (Venezuela), San Salvador (El Salvador), Rio de Janeiro (Brazil), Santiago (Chile) and Buenos Aires (Argentina).
Pursuant to the Transaction, VGS will arrange for a group of investors to subscribe for $2,970,000 of a new class of common shares of AldeaVision at $1.20 per share. As part of the transaction, the holders of AldeaVision’s convertible debentures will convert $3,511,520 of their existing convertible debentures into 2,194,700 common shares, at $1.60 per share. The shareholders and debentureholders will then exchange a portion of their common shares for shares of a new wholly owned subsidiary of AldeaVision, called AldeaVision Solutions Inc. ("AVS").
The new AVS will operate the company’s existing business while AldeaVision itself will then change its name and add a new line of work, the creation, acquisition and marketing of seismic data for use in the oil and natural gas industry ("SeismicCo"). Through the Class A Shares that they received, the shareholders and debentureholders will initially be the holders of approximately 4% of the outstanding equity securities in SeismicCo. SeismicCo will make an application to list the Class A Shares on the TSX-V. The availability of a listing will depend upon the ability of SeismicCo to develop a business which meets the listing requirements of the TSX-V.
