Business
Allen Vanguard updates investors on expressions of interest in outside investment and financing requirements
OTTAWA, Sept. 16 /CNW Telbec/ - Allen-Vanguard Corporation (TSX: VRS) ("Allen-Vanguard" or the "C...
About this update from Verisante Technology, Inc.
[{"type":"text","content":"\n\n\n\nOTTAWA, Sept. 16 /CNW Telbec/ - Allen-Vanguard Corporation (TSX: VRS)\n("Allen-Vanguard" or the "Company") of Ottawa, Canada updated investors today\non the status of its evaluation of expressions of interest for significant\ninvestment in the Company by outside investors. As reported on August 14, 2008\nin its financial results news release for the third quarter of fiscal 2008,\nthe Company had received several unsolicited expressions of interest in a\nsignificant investment position in the Company and had engaged RBC Capital\nMarkets (the "Investment Bankers") to assist with an evaluation of proposals.\n\n\nAt August 14 the Company had accepted a proposed non-binding term sheet\nfrom one investor with terms based on advanced due diligence already\nsubstantially completed by the investor, and with an intended closing date\nbefore September 30, 2008. However, the final terms proposed by the investor\nsubsequent to August 14 differed materially from the initial proposal and the\nboard rejected it on the basis that it was not in the best interest of\nAllen-Vanguard or its shareholders.\n\n\nSince then, the Company has asked its Investment Bankers to consider the\nremaining unsolicited expressions of interest, and also to solicit interest\nfrom other potential investors and explore alternative recapitalization\nscenarios. The Company currently has long-term debt of approximately\n$185 million under a $200 million term loan facility with a banking syndicate\nled by the Royal Bank of Canada (the "lending syndicate"), under which it is\nrequired to make quarterly principal payments of approximately $10 million and\nmeet certain financial covenants which are measured as at the end of each\nquarter. The Company was in compliance with the terms of the facility for the\nlast reported period at June 30, 2008. The Company also has a revolving credit\nfacility of up to $50 million limited by a borrowing base (the "Revolver")\nwith the same lending syndicate. The borrowing base contains a number of\neligibility requirements including with respect to foreign receivables. At\npresent, it is drawn to a cash amount of only $8.0 million and an encumbrance\nof $3.6 million on account of letters of credit. If the eligibility\nrequirements were changed, this Revolver would be sufficient for wo...