Sunstate International Ltd.- resumption of trading, negotiation for debt conversion and equity commitment
CHICAGO–(BUSINESS WIRE)–Jan. 19, 1996–Sunstate International Ltd. (“SNST”, Canadian Dealing Network) announces that trading in the company’s shares will resume shortly on the Canadian Dealing Network.
Trading had been suspended on May 31, 1995, due to the company’s failure to deliver to the Ontario Securities Commission the required audited financial statements. Consolidated financial statements for the period from incorporation to Dec. 31, 1994, were published in October 1995.
These statements showed goodwill of $3,279,563, representing the excess in the book values of liabilities over assets of the companies acquired in the amalgamation as of the date of acquisition. The accounting treatment was consistent with the pro forma financial statements published in the Information Circular of North American Rare Metals Limited (“North American”) dated April 13, 1995, which described the proposed amalgamation of North American with Sunstate.
Following discussions with the Ontario Securities Commission, the company has decided to revise the Dec. 31, 1994, financial statements and record such excess as a charge to deficit. Revised audited financial statements giving effect to this to this decision have been filed with the appropriate regulatory bodies, copies of which are available on request from the company.
The company also announces that it has held discussions with its senior secured lender under which its senior debt could be converted to equity. The company has received a commitment from a newly formed media investment fund to match this amount in new equity if the company’s senior lender agrees to convert its debt to equity.
Sunstate officials have proposed that US$3 million be converted into a new preferred stock issue simultaneously with the investment of a like amount in new equity by a media investment fund. Negotiations are continuing with a proposed closing date expected to be in first quarter of 1996.
As part of the negotiations for this change in debt structure, Sunstate and its lender have agreed to the appointment of Thomas M. Duddy of Louisville, Ky., to manage the financial affairs of one subsidiary during this interim period. This will also permit a cash infusion of additional debt to bring current certain accounts payable.
Sunstate is a holding company which operates through two wholly owned subsidiaries, Sunstate Cablesystems, Inc. and Sunstate Cablesystems II, Inc. These subsidiaries own and operate private and franchised cable television systems in the Orlando-Tampa area of central Florida. -0- DATED: Jan. 19, 1996 ON BEHALF OF THE BOARD OF DIRECTORS Kenneth D. Anderson, President
CONTACT: Bill Roberts (Tampa), 813/626-2555
Murray R. Nye (Winnipeg), 204/989-2434
Andy Sensenig (Dallas), 214/418-6851
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