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Cygnal Technologies completes US$5 million debt financing9 March 2006
Cygnal Technologies Corporation (TSX: CYN) today announced that it has secured additional debt financing from its lender, Laurus Master Fund, Ltd. Laurus has agreed to provide a revolving loan of up to US$5 million bearing interest at prime plus 2%. Cygnal intends to use the proceeds for general working capital purposes.
As consideration for extending the loan, Cygnal has agreed to pay Laurus a closing payment of US$175,000 and to issue to Laurus 575,000 common shares of Cygnal at $ 1.17 per share, being the weighted average trading price for the past twenty days. The loan is non-convertible and is repayable in full after two years. The loan is secured pursuant to existing security granted to Laurus against the assets of Cygnal's Network Operations business and certain of its subsidiaries.
"We expect our cash needs for the year to peak during the first quarter, which is typically Cygnal's slowest due to seasonality in our business," said Jos Wintermans, Chief Executive Officer of Cygnal. "In addition, we are currently incurring some one-time costs as we proceed with the implementation of our productivity program. We believe this financing supports the execution our business plan over the next 24 months, and we are pleased with Laurus' readiness to continue to support our efforts."
About Cygnal
Cygnal Technologies Corporation is a leading Canadian provider of network communication solutions including the design, installation, maintenance and management of wired and wireless communication networks. The Company offers a full range of technologies and solutions for service providers and enterprise customers. Cygnal has expertise in voice, video and data solutions over traditional and next generation converged technologies.
Cygnal Technologies Corporation is headquartered in Markham, Ontario and supports end-user customers and business partners through 14 offices across Canada, including Vancouver, Edmonton, Calgary, Winnipeg, London, Burlington, Brampton, Toronto, Sudbury, Ottawa, Montreal, Quebec City and Halifax. Cygnal common shares are listed on the Toronto Stock Exchange under the symbol CYN.
No stock exchange or regulatory authority has approved or disapproved of information contained herein. Certain information included in this news release is forward-looking and is subject to important risks and uncertainties. When used in this news release, the words "believe", "intend", "estimate", "expect", "plan" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. These forward-looking statements are based on current expectations. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other things, the impact of price and product competition, the ability of the Corporation to make acquisitions and/or integrate the operations and technologies of acquired businesses in an effective manner, general industry and market conditions and growth rates, the impact of consolidations in the telecommunications industry and stock market volatility. For additional information with respect to certain of these and other factors, see the reports filed by Cygnal Technologies with applicable Canadian securities administrators. Cygnal Technologies disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
%SEDAR: 00000748E
For further information: James Shannon, Vice-President & CFO, Cygnal Technologies Corporation, (905) 944-6500, jwintermans@cygnal.ca; Monica Bettencourt, Investor Relations, The Equicom Group Inc., (416) 815-0700 ext. 232, mbettencourt@equicomgroup.com; To request a free copy of this organization's annual report, please go to http://www.newswire.ca and click on Tools for Investors.
Source: newswire
All trademarks and copyrighted information contained herein are the property of their respective owners.
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