GLBT go0nna move on news
GlobalNet Corporation Announces Settlement with Major Equipment Vendor and Acquisition of Leasehold Assets
THE WOODLANDS, Texas -- (Business Wire) -- Nov. 16, 2004
Company Settled over $16 Million in Debt over Last 30 Days
¶ GlobalNet Corporation (OTCBB:GLBT) (www.gbne.net), a major
provider of international telecommunications services, today announced
that it has reached a contractual settlement with Cisco Systems
Capital Corporation, from whom the Company's principal operating
subsidiary, GlobalNet International LLC (LLC), had leased the majority
of the telecommunications equipment used in its wholesale telephony
business. In exchange for a $750,000 cash payment by the Company to
Cisco, all leasehold obligations owed by LLC to Cisco will be
satisfied and the Company will take title to the leased equipment. The
settlement eliminates $2.8 million in debt obligations from the
Company's consolidated balance sheet, a $225,000 monthly payment
towards the debt obligations and allows the Company to deploy the
newly-acquired leased equipment to the maximum benefit of the
Company's overall VoIP business.
¶ Earlier this month the Company announced an agreement with its
principal shareholder whereby its major shareholder Growth Enterprise
Fund, S.A. (GEF) has surrendered to the Company for cancellation
100,000 shares of Series A Convertible Preferred Stock, which
represents all of the Company's outstanding preferred stock. The
preferred stock is valued at over $14 million and was redeemable
monthly for cash payments totaling $250,000 or 156,250,000 shares of
common stock, which the Company has been making since January 1, 2004.
The cancellation represents a monthly cash savings for the Company of
$250,000 and a total cash savings of over $14,000,000. When combined
with the Cisco Systems Capital Corporation settlement this represents
$16.8 million in debt settlement and eliminates $475,000 in monthly
obligations resulting from these settlements.
¶ LLC is currently in reorganization under Chapter 11 of the U.S.
Bankruptcy Code, in the United States Bankruptcy Court for the
Southern District of New York. The settlement with Cisco was approved
by the bankruptcy court.
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