Stonepath Group Debt Restructured With New Lender
February 12 2007 - 11:54PM
PR Newswire (US)
Mass Financial Signs Letter of Intent to Extend Stonepath $20
Million Line of Credit SEATTLE, Feb. 12 /PRNewswire-FirstCall/ --
Stonepath Group (AMEX:STG), a global logistics services
organization ("Stonepath"), today announced a new strategic
relationship with Mass Financial Corp. ("Mass Financial"), an
international merchant bank with diverse global business
relationships, that will provide the capital Stonepath needs to
expand its business in Asia and North America. Mass has purchased
Stonepath's entire credit facility from Laurus Master Fund, Ltd.,
to which Stonepath will issue 3.5 million shares of STG common
stock. As a result of this transaction, Stonepath's aggregate
indebtedness to Mass Financial was $4 million as of February 9,
2007. Mass Financial and Stonepath have also executed a letter of
intent whereby Mass Financial will provide Stonepath with a $20
million revolving line of credit ("LOC"), subject to satisfaction
of a number of normal conditions including satisfactory completion
of a due diligence review. The parties anticipate that this new
financing facility will be in place within the next 30 days. Under
the terms of the letter agreement, the credit line will be
convertible into Stonepath stock at a conversion price equivalent
to 85% of its value, as determined by a mutually agreed upon a
third-party valuation. Following completion of the financing
transaction, Stonepath will pay a transaction fee of $2.5 million,
a Merchant Banking Fee of $1.2 million, and all of Mass Financial's
legal fees. In addition, Stonepath is also obliged to pay Mass
Financial a break-up fee of $750,000 if it enters into an
alternative financing transaction within the next three months.
Stonepath will also grant a right of first refusal to Mass for any
additional financing requirements within the next three years.
Based in Hong Kong, Mass Financial and its affiliated companies
have global investments in industrial and engineering services,
merchant banking, investing and trading activities. "Mass Financial
has given us the opportunity to restructure our debt, and will
grant us access to the capital we need to grow our business,"
stated Bob Arovas, Chief Executive Officer. "We can now return our
focus to expanding our core business -- providing customer-focused
logistics and transportation services. The China and Southeast Asia
markets provide the greatest opportunities for growth, although we
will certainly maintain or expand our North American presence as
well." The letter of intent also contemplates the continued
employment of Arovas and Chief Financial Officer Bob Christensen,
and requires that Stonepath's Board of Directors be reduced to
three members. All existing directors resigned and were replaced by
a new board consisting of Slobodan Andjic, Martin Muller-Romheld,
and James M. Carter. "I thank the Board of Directors that have
agreed to step aside as part of this financing," Arovas said.
"Their final acts as Board Members reflect their commitment to
Stonepath Group and its shareholders. Without their dedication, the
restructuring of the company over the past few months and this debt
restructuring would not have been possible. I think I speak for all
Stonepath shareholders when I extend my sincere gratitude for their
years of service". "With the restructuring of Stonepath behind us,
we can now begin the expansion phase," Arovas said. "We will
continue to focus on providing the best service available in the
transportation and logistics industries. I would like to thank the
Stonepath employees and customers for their support and dedication
during this difficult process, and I look forward to maintaining
these relationships as we return our focus towards growing our
global presence." About Stonepath Group Stonepath Group is a
global, third-party logistics organization providing a full range
of transportation and distribution solutions to multinational and
local businesses, including a diverse client mix of retail leaders,
automotive and technology concerns, government agencies, and
defense contractors. This Press Release includes forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, regarding future results, levels of activity,
events, trends or plans. We have based these forward- looking
statements on our current expectations and projections about such
future results, levels of activity, events, trends or plans. These
forward- looking statements are not guarantees and are subject to
known and unknown risks, uncertainties and assumptions about us
that may cause our actual results, levels of activity, events,
trends or plans to be materially different from any future results,
levels of activity, events, trends or plans expressed or implied by
such forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "guidance,"
"may," "will," "should," "could," "would," "expect," "plan,"
"anticipate," "believe," "estimate," "continue" or the negative of
such terms or other similar expressions. Mass Financial's
obligation to advance funds to us is subject to satisfaction of
numerous conditions, and there is no guaranty that all of these
conditions will be satisfied. Although it is impossible to identify
all of the other factors that may cause our actual results, levels
of activity, events, trends or plans to differ materially from
those set forth in such forward-looking statements, such factors
include the inherent risks associated with: (i) our ability to
sustain an annual growth rate in revenue consistent with recent
results, (ii) our ability to achieve our targeted operating
margins, (iii) our ability to compute our restructuring efforts
within the costs we now expect, (iv) our ability to realize the
planned benefits from our restructuring efforts, (v) our dependence
on certain large customers, (vi) our dependence upon certain key
personnel, (vii) an unexpected adverse result in any legal
proceeding, (viii) competition in the freight forwarding, logistics
and supply chain management industry, (ix) the impact of current
and future laws affecting the Company's operations, (x) adverse
changes in general economic conditions as well as economic
conditions affecting the specific industries and customers we
serve, and (xi) regional disruptions in transportation. Other
factors that might cause or contribute to such a discrepancy
between expected and actual results include, but are not limited
to, those factors identified in our Securities and Exchange
Commission filings (including our Annual Report on Form 10-K for
2005), other public documents and recent press releases, which can
be found on our corporate web site, http://www.stonepath.com/.
Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date made.
We undertake no obligation to publicly release the result of any
revision of these forward-looking statements to reflect events or
circumstances after the date they are made or to reflect the
occurrence of unanticipated events. http://www.stonepath.com/
DATASOURCE: Stonepath Group CONTACT: Jeff Meston of The Cereghino
Group Stonepath Group, +1-206-802- 3927 Web site:
http://www.stonepath.com/
Copyright
Stonepath (AMEX:STG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Stonepath (AMEX:STG)
Historical Stock Chart
From Jul 2023 to Jul 2024