Axia Announces Agreement to sell its interest in OpenNet
CALGARY, Aug. 22, 2013 /CNW/ - Axia NetMedia Corporation (Axia) announces that its wholly-owned subsidiary, Axia NGNetworks Asia Pte. Ltd. (Axia Asia), SPH Net Pte. Ltd. (SPH), SPT Net Pte. Ltd. (SPT) (Axia Asia, SPH and SPT collectively, the Vendors) have entered into a share purchase agreement (the Agreement) with CityNet Infrastructure Management Pte. Ltd. in its capacity as Trustee-Manager of NetLink Trust (the Purchaser) to sell their aggregate 70% interest in OpenNet Pte. Ltd. (OpenNet) to the Purchaser. Pursuant to the Agreement, SPH and SPT will sell their respective 25% and 15% interests in OpenNet to the Purchaser on the same terms.
Axia Asia will sell its 29,744,999 ordinary shares of OpenNet representing approximately 30% of the issued and paid-up share capital of OpenNet, to the Purchaser, for aggregate cash consideration of approximately S$38 million (approximately CDN$31 million) (the Transaction).
Art Price, Chairman and CEO of Axia, commented "It is already clear that Singapore's Next Generation Network strategy is going to be a great success for consumers. Customers in Singapore are already benefiting from enhanced choice of both services and service providers. Market adoption is running well ahead of forecasts. When I agreed that Axia would lead the OpenNet Consortium, it was because Axia's approach to NGN solutions was aligned with Singapore's policy objectives and we had SPH and SPT as partners. Axia accepted the purchase offer based on OpenNet having successfully achieved its primary mandate of deploying a ubiquitous fibre network in Singapore, our partners' preference to sell based on this achievement, our preference to hold majority interests and Axia having equally attractive alternative uses for the capital currently deployed in Singapore. Upon completion of the sale, Axia's Board will determine the best use of proceeds for the benefit of Axia shareholders."
OpenNet, Singapore Telecommunications Ltd. (SingTel Parent) and the Purchaser, have jointly filed a consolidation application (the CA) with the Info-communications Development Authority of Singapore (the IDA) seeking regulatory approval for the purchase of 100% of OpenNet by the Purchaser. The IDA will hold a public consultation as part of the approval process.
In addition to regulatory approval by IDA, the Transaction is subject to the following additional conditions precedent including, but not limited to: (i) the completion of due diligence investigations of OpenNet by SingTel and the Purchaser; (ii) receipt by OpenNet and the Purchaser of the written consents of the Monetary Authority of Singapore and any other relevant governmental or regulatory authority necessary to complete the Transaction; and (iii) determination by SingTel Parent that the terms of the regulatory approval by the IDA are acceptable to SingTel Interactive Pte. Ltd. (SingTel). Concurrently, SingTel will sell its interest in OpenNet to the Purchaser.
The Agreement expires on November 30, 2013, unless otherwise extended by the agreement of the Vendors and the Purchaser.
OpenNet is a nationwide fibre to the premise network in Singapore that sells dark fibre services to residential, commercial and government end users. The network passes approximately 1.2 million residential and 26,000 commercial premises.
Axia owns, operates and sells services over fibre optic communications infrastructure. Axia trades on the Toronto Stock Exchange under the symbol "AXX".
This News Release contains forward-looking statements, including, without limitation, statements containing the words "should", "believe", "anticipate", "may", "plan", "will", "continue", "intend", "expect", "estimate" and other similar expressions which constitute "forward-looking information" within the meaning of applicable Canadian securities laws. These statements are based on our current expectations, estimates, forecasts and assumptions about the operating environment, economies and markets in which we operate and are subject to important assumptions, risks and uncertainties that are difficult to predict. Examples of these statements would include those where Axia forecasts its success and timing in winning new NGN business, the timing of completion and estimated total costs of our networks, the revenues and operating costs associated with these networks over time, and Axia's ability to generate future cash flows and avail itself of other financing alternatives given current market conditions. The assumptions, risks and uncertainties that could cause actual results to differ materially from the forward-looking information, include, but are not limited to, changes in customer markets, changes in demand for our services, our inability to deliver services in a timely and cost efficient manner, technological change, general economic conditions and other risks detailed from time to time in our ongoing filings with the Canadian securities regulatory authorities, including those in our Annual Information Form, which filings can be found at www.sedar.com. Given these assumptions, risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise.
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