Rocky's view on the Russian deal as it stands:
Subject: ALL: Posted By: Rocky1
Date/Time: 03/18/2006 12:46 PM CST Message #: 539 of 539
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Hopefully this post will cover some previous questions.
Trading Halt(the following is a quote from our CEO regarding the trading halt, posted with permission)
"We didn’t ask for the halt. While we were talking with the Amex on the
wording about the release, the Amex halted the stock. I am not sure why the
stock would be halted if only the company and the exchange had the release,
even if it was under discussion. They might have be afraid of a leak or
something else so they halted it until the language in the release was
understood by them and also they agreed with the style and form of the
release. Once they agreed with the wording, they approved the release and
unhalted the stock."
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Everything below is my opinion only:
First, this is NOT a done deal. Done deals do not contain contingencies.
External Expert Opinion:
The remaining contingencies of this deal remain in the hands of the "major European bank", also known as "lead bank", "senior bank", or in simple language, the big dog.
If the following is off the table it is cerainly a big step, take note it was Internafta that said the following:
"Internafta has stated that the banks have successfully completed their due diligence regarding the underlying assets of Internafta's shareholders that collateralize the banking instrument."
Assuming the assets covering the financing part is over the "expert external opinion" is the next hurdle. It seems very logical to me that the lead Bank would seek outside expertise on a project of this magnitude. As the PR pointed out the two areas of focus will be:
1)Is the 30 city Russian wireless project Feasible:
Will it work? Is it practical? Is it needed? Here are a few items that come to mind.
a)Is Russia in need of such service.
b)Are the user goals stated by GTE-Internafta reasonable?
c)Will the service be affordable
d)Are the stated operating revenues reasonable
2)Globetels ability to Implement the Project
a)Does GTE posess the staff and expertise
b)Does GTE have the stated technology
c)Does GTE have suppliers for large quanities equipment
Because GTE is young and in the growth stage, providing an existing track record of wireless cities or wireless countries for the bank and the experts viewing is not something they can do at this time. With that said, it would be my opinion the "experts" will put considerable weight on GTE's ability to construct a project of this size. Verifications by experts on every angle of GTE are expected, imo.
I have no doubt GTE put together a comprehensive plan for the lead bank and for the outside experts to view. I also believe the exceptional staff Huff has employed in the wireless arena of their business will impress all involved. The lead bank is looking for a confirmation that GTE has what it takes to accomplish the project as they are not in favor of going through the process of disposing Internafta assets to recoup funds from a failed or incomplete project. Once the agreement moved to bank funding it definitely took on a different look with bank requirements and verifications being "a part of the process".
I applaud Mr. Huff and staff for keeping this project alive. The credibility associated with executing a project of this size is enormous along with the financial impact for GTE and their shareholders. Being a public company and being required to report continuous delays is difficult to say the least. Having our experienced newly appointed Wireless Director doing face to face meetings with other parties is very beneficial imo to stay on top of progress or lack of progress.
Bottom line: We are still in the hunt..
