SR Telecom announces the completion of its 8.15% Debentures Exchange Offer, changes to its board of directors and the departure
25 August 2005 - 7:36PM
PR Newswire (US)
MONTREAL, Aug. 25 /PRNewswire-FirstCall/ -- SR Telecom Inc. (TSX:
SRX; Nasdaq: SRXA) announced the completion of its offer to
exchange its outstanding CDN$71 million 8.15% debentures due August
31, 2005 (the "8.15% Debentures") and accrued interest thereon of
approximately CDN$4.8 million into new 10% Secured Convertible
Debentures due October 15, 2011 (the "10% Secured Convertible
Debentures"). SR Telecom also announced the resignation and
appointment of certain board members and the departure of Mr. David
Adams, its Senior Vice-President, Finance and Chief Financial
Officer. Completion of the Exchange Offer As previously announced,
CDN$70.5 million in principal amount of the 8.15% Debentures were
tendered, representing approximately 99.3% of the outstanding 8.15%
Debentures. In exchange, the Corporation issued CDN$75.3 million of
10% Secured Convertible Debentures, representing principal and
accrued interest on the 8.15% Debentures tendered. Funds and
accounts managed by DDJ Capital Management, LLC hold approximately
33% of the outstanding 10% Secured Convertible Debentures. In
addition, SR Telecom has amended the terms of the 8.15% Debentures
to, among other things, extend the maturity thereof to coincide
with the maturity date of the 10% Secured Convertible Debentures
and remove certain covenants. Holders of 8.15% Debentures who did
not tender under the exchange offer continue to hold such
debentures, which debentures are governed by the indenture so
amended. "We are pleased with the conclusion of the balance sheet
restructuring of SR Telecom. We can now turn our attention to the
innovation and customer service aspects of the business, as we
develop and deploy our symmetry and WiMax solutions," said William
E. Aziz, Interim President and Chief Executive Officer. Jackson S.
Craig, Vice President of DDJ Capital Management, also commented,
"The consummation of the exchange offer completes the Company's
recapitalization plan, and puts SR Telecom on a solid footing to
execute on its business plan and capitalize on its future growth
prospects." Changes to the Board of Directors As contemplated under
the previously announced recapitalization plan of the Corporation,
SR Telecom also announced the resignation of John C. Charles,
Constance L. Crosby, Nancy E. McGee, Peter L. Jones, Paul E. Labbe
and Robert E. Lamoureux as members of the board of directors of the
Corporation effective today. On behalf of the Corporation, Lionel
Hurtubise, Chairman of the SR Telecom Board of Directors, said, "SR
Telecom wishes to thank the outgoing directors for their leadership
and service to the Corporation and wish them success in their
future endeavours." The board of directors of the Corporation has
appointed Kirk Flatow, Patrick J. Lavelle and Paul J. Griswold to
act as directors effective today, filling three of the vacancies
created by such resignations. SR Telecom expects that some of the
remaining vacancies shall be filled at a future date. Mr. Flatow is
Senior Vice President, Advanced Semiconductor Packaging Group of
Tessera, Inc. Prior to that, he served as Senior Vice President of
Marketing and Sales, a position he assumed in February 2002. From
January 2001 to December 2001, Mr. Flatow served as President and
Chief Executive Officer of Novera Optics, Inc., a dynamic optical
component company. From April 1997 to January 2001, Mr. Flatow held
several executive positions at Harmonic, Inc., an optical
networking company, including President of Broadband Access Network
Division, Vice President of Worldwide Sales and Vice President of
International Operations. From October 1994 to April 1997, Mr.
Flatow served as Vice President of Business Development-North
America for Flextronics International Ltd. Mr. Flatow was
co-founder of nCHIP Inc. where, from February 1989 to October 1994,
he held senior level positions including Vice President of
Worldwide Sales, Vice President of Japan, Vice President of Finance
and Chief Financial Officer. Mr. Flatow received a B.S. from the
University of Santa Clara and an M.B.A. from the University of
Chicago. Mr. Lavelle is Chief Executive Officer of Patrick J.
Lavelle and Associates, a management consulting firm. Mr. Lavelle
is currently Chairman of UE Waterheaters Inc., and is a director of
McQuarry Energy Inc., Westport Innovations Inc., Tahera Diamond
Corporation, and Canadian Bank Note Company Limited. He serves as a
Trustee of Arriscraft International Income Fund and Retrocom
Mid-Market Real Estate Investment Trust. He is Chairman of the Bay
of Spirits Gallery and on the advisory board of International
M.B.A. Program at York University. Mr. Lavelle has previously
served as Chairman and CEO of Unique Broadband Systems Inc., VP
Corporate Development at Magna International Inc., Chairman of
Export Development Corp., Chairman of the Business Development Bank
of Canada, and a director of Lions Gate Entertainment Corp., Solign
Technologies, Inc., Algoma Steel Inc., Proprietary Industries Inc.,
Newmex Minerals Inc. He was Chairman of Canadian Council for
Aboriginal Business. He has served as Deputy Minister of Industry,
Trade and Technology for Ontario, First Secretary of the Premier's
Council, a senior advisor to the Planning and Priorities Board of
the Ontario Cabinet and as agent General for the Government of
Ontario in Paris, France. Mr. Griswold is CEO of SLI Holdings
International, LLC of Purchase New York. Prior to May 2003, he
served as the President, Chief Executive Officer and Director of
Paxar Corporation. He was elected President and Chief Executive
Officer of the company in August 2001. He had previously served as
the President and Chief Operating Officer since February 2000.
Prior to that time, Mr. Griswold was the Senior Vice President,
Protective Packaging and International Operations, at Pactiv
Corporation, formerly Tenneco Packaging. Prior to joining Tenneco
in 1994, he was the Vice President of Packaging Development and
Procurement for Pepsi International. Departure of the Chief
Financial Officer The Corporation announced the departure of David
Adams as Senior Vice- President, Finance and Chief Financial
Officer. To ensure proper transition, an agreement has been made
that Mr. Adams will continue in his current capacity until no later
than October 11, 2005. "David has helped guide the Corporation
through a challenging period and SR Telecom is grateful to David
for his dedicated service," said Lionel Hurtubise, Chairman of SR
Telecom's Board of Directors. "We would like to thank him for his
contributions during his years with SR Telecom and wish him success
in his future endeavours." Mr. Hurtubise indicated that a search is
already in progress for Mr. Adams' replacement. Financial Advisor
Genuity Capital Markets advised SR Telecom on the recapitalization
plan and led negotiations with the Debenture holders. About SR
Telecom SR TELECOM (TSX: SRX, Nasdaq: SRXA) designs, manufactures
and deploys versatile, Broadband Fixed Wireless Access solutions.
For over two decades, carriers have used SR Telecom's products to
provide field-proven data and carrier-class voice services to
end-users in both urban and remote areas around the globe. SR
Telecom's products have helped to connect millions of people
throughout the world. A pioneer in the industry, SR Telecom works
closely with carriers to ensure that its broadband wireless access
solutions directly respond to evolving customer needs. Its turnkey
solutions include equipment, network planning, project management,
installation and maintenance. SR Telecom is a principal member of
WiMAX Forum, a cooperative industry initiative which promotes the
deployment of broadband wireless access networks by using a global
standard and certifying interoperability of products and
technologies. About DDJ Capital Management, LLC DDJ Capital
Management, LLC is a boutique investment manager specializing in
private equity and debt financings, as well as high yield and
special situations investing. Founded in 1996, the Wellesley,
Massachusetts based investment firm currently manages approximately
$3 billion on behalf of 78 institutional clients. FORWARD-LOOKING
STATEMENTS Except for historical information provided herein, this
press release may contain information and statements of a
forward-looking nature concerning the future performance, financial
condition and financing plans of the Corporation. These statements
are based on suppositions and uncertainties as well as on
management's best possible evaluation of future events. Such
factors may include, without excluding other considerations,
fluctuations in quarterly results, evolution in customer demand for
the Corporation's products and services, the impact of price
pressures exerted by competitors, and general market trends or
economic changes. As a result, readers are advised that all of the
forward-looking statements in this news release are qualified by
these cautionary statements and actual results or developments may
differ from expected results or developments and that such
differences may be significant. The Corporation expressly disclaims
any obligation to update any forward-looking information. SR
TELECOM is a trademark of SR Telecom Inc. All rights reserved 2005.
All other trademarks are property of their owners. DATASOURCE: SR
TELECOM INC. CONTACT: Mr. William E. Aziz, Interim President and
CEO, (514) 335-2429 Ext.4613
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