Press Release Source: GlobeTel Communications Corp.
GTEL Provides Update on Financing and Other Debt Reduction Activities
Monday August 11, 12:59 pm ET
MIAMI--(BUSINESS WIRE)--Aug. 11, 2003--GlobeTel Communications Corp. (OTCBB:GTEL - News) today announced that the company has been working with a financing group to obtain a financing facility for up to $5 million. The facility is being processed with several major European banks and will be a collateralized loan with interest rates of 5.5% per annum, payable over 5 years.
Timothy M. Huff, CEO of GTEL, stated that the initial $1.6 million dollar loan is presently being processed, and that preferred shares will serve as collateral for the loan. Mr. Huff pointed out that the preferred shares can only be converted upon default and that if, for any reason, the loan is not funded, the preferred shares will be cancelled.
Mr. Huff continues, "With favorable interest rates and payment terms, this is an extremely attractive financing opportunity being made available to the company. However, just like all other financing vehicles, everything is subject to change until the process is completed and the funding is in the Company's hands. We advise everyone not to make any decision based on this information until we have formally completed the transaction, upon which another announcement will be made. We have also explored other financing avenues in order to be able to accelerate projects and bring other opportunities on line. Some of these are in various phases of due diligence by both parties."
The company also announced that its officers have agreed to accept stock considerations as payment of their accrued salaries for previous years. This will result in a reduction of over $700,000 in accrued officers' salaries and enhancement of the company's financial landscape, placing the company in a more attractive position to obtain future financing.
Mr. Huff states, "Once again, management has demonstrated its commitment to our agreed-upon goals and future success in making personal sacrifices such as reduced salaries and now the conversion of personal equity in order to reduce corporate liabilities."
Certain statements in this release constitute forward-looking statements or statements which may be deemed or construed to be forward-looking statements within the meaning of the Private Placement Act of 1995. The words "forecast", "project", "intend", "expect", "should", "would", and similar expressions and all statements, which are not historical facts, are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance (finance or operating) or achievements to differ from future results, performance (financing and operating) or achievements expressed or implied by such forward-looking statements. The above are more fully discussed in the Company's SEC filings.
