Teliphone Corp. Announces the Sale of Its Wholly Owned Subsidiary Teliphone Navigata-Westel Communication Inc. to Investel Capital Corporation
January 20, 2014 --
VANCOUVER, British Columbia, Jan. 20, 2014 (GLOBE NEWSWIRE) -- Vancouver-based Teliphone Corp. (OTCQB:TLPH), one of the world's local digital telecommunications companies, announced today that it has executed a definitive agreement with Investel Capital Corporation (Investel) for the sale of all issued and outstanding shares of its wholly-owned subsidiary, Teliphone Navigata-Westel Communication Inc. (TNW). TNW currently has 130 employees and approximately CD$55 million in annual sales.
Under the agreement which received majority shareholder consent and was executed on January 20, 2014 with an effective date of December 31, 2013 Investel will pay CD$45 million for the shares. The sale was prompted in part by the inability of Teliphone Corp to receive a waiver from the requirement under US Securities and Exchange Commission Regulations S-X to audit Navigata Communications 2009 Inc. (Navigata). Teliphone purchased Navigata's network, operations and specific assets in December 2012. Teliphone determined that it would be prohibitively expensive, lengthy and difficulty if not impossible to audit Navigata as it did not purchase the company itself. The current sale will however, provide Teliphone shareholders with value for all investments made since its creation in 2004 and will allow the company to continue to further grow through acquisition. TNW becomes a Canadian controlled private corporation (CCPC) and as a result of the transaction will have a stronger balance sheet and positive working capital. With its improved financial situation, TNW will be better positioned to accelerate its business plan of growth through increased sales and through acquisition.
Benoit Laliberté, President of Teliphone stated, "We have been building Teliphone Corp since 2004 through organic growth, acquisition and consolidation. The timing was right to sell our core Canadian asset and continue our growth plan. Teliphone Corp will now focus on the US market where it will continue its successful business strategy of seeking out and acquiring distressed telecommunications assets and turning them around. TNW will pursue a similar strategy in the Canadian market as a competitive local exchange carrier."
Teliphone will file all required disclosures with the US Securities and Exchange Commission within the prescribed period.
About Teliphone Navigata-Westel Inc.
From its origin in 1957 as BC Rail Telecom, to its evolution into Teliphone Navigata-Westel, the company, with 130 employees and approximately CD$55 million in annual sales, it is now one of the largest independent facilities-based Competitive Local Exchange Carriers (CLEC) in Canada. TNW's entire network has been designed with a major focus on being able to serve its data center clients with unsurpassed access, reliability and cost-effectiveness. Overall the company provides voice, data, broadband Internet, IT support, cloud computing, co-location data centers and IPTV service across Canada. TNW services carriers, business, government and residential customers on its national network which includes a wireless backhaul network, a trans-Canada SONET fibre optic network and multiple CLEC/ILEC Central Office (CO) facilities. TNW also operates a US network and its voice and IPTV services are available in 47 countries.
About Teliphone Corp
Established in 2004, Teliphone Corp is a holding company for companies in the telecommunications industry. Its mission is to act as an incubator for the development of telecommunications companies. Since it began, the company has grown through a strategy of acquisition, restructuring and consolidation. The company pioneered Internet based voice telecommunications in Canada as well as creating and operating the world's first telecommunications commodity 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.
This press release includes "forward-looking statements" as defined by the SEC. All statements, other than statements of historical fact, included herein that address activities, events or developments that Teliphone Corp expects, believes or anticipates will or may occur in the future, including anticipated benefits and other aspects of the proposed acquisition, are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of their dates. Except as required by law, Teliphone Corp does not intend to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACT: Lawry Trevor-Deutsch
Senior Vice President, Corporate Affairs
Tel: +1 604 990 2000