VANCOUVER, British Columbia, Oct. 06, 2017 (GLOBE NEWSWIRE) -- Urban Communications Inc. (TSX-V:UBN) (the “Company”) announces that the Bridge Loan between the Company and ACME Communications Canada, Inc. (“ACME”) has been concluded and funds fully advanced. The Bridge Loan is an integral part of the arrangement agreement dated August 31, 2017 (the “Arrangement Agreement”) whereby ACME will acquire all of the issued and outstanding common shares of the Company by way of a statutory plan of arrangement under the Business Corporations Act (British Columbia) (the “Arrangement”).
The principal amount of the Bridge Loan is $500,000, bearing interest at 6.5% per annum and is secured by a first priority security interest in the Company’s revenue and accounts receivable, and a second priority security interest in the Company’s assets subject to a loan in favour of MHI Finance Corp. No fee is payable in connection with the loan.
Interest on the Bridge Loan accrues during the term, and the principal and any accrued interest shall become due and payable on the earlier of December 31, 2017, the closing of the Arrangement, or upon the acceptance by the Company of a “Superior Proposal” as contemplated in the Arrangement Agreement. The Company has the right at any time to repay all or part of the Bridge Loan without notice, bonus or penalty.
Conditions to the obligation of ACME to advance funds under the Bridge Loan included delivery by the Company of Support Agreements from Securityholders representing 73,600,000 votes eligible to be cast at the special meeting called to approve the Arrangement. Delivery of the required Support agreements is also one of the conditions for payment by ACME of a termination fee of $400,000 in certain events, including the failure by ACME to conclude the Arrangement after the court and Securityholders have approved the Arrangement. The Company has delivered the required Support Agreements.
The Bridge Loan is to cover operating expenses between the execution of the Letter of Intent between the parties on July 4, 2017, and the approval of the Arrangement by the Company’s Securityholders and the Court and the subsequent closing of the transaction scheduled for November 3, 2017.
ABOUT URBAN COMMUNICATIONS INC.
Urban Communications Inc. one of the country’s first telecommunications company to deliver Gigabit Internet service to the home, provides a full suite of Internet, voice, video and broadband application products over its 300 km. state-of-the-art carrier grade fibre optic network in Metro Vancouver and Victoria to commercial, residential and public sector customers.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
URBAN CONTACT INFO:
John Farlinger, Chief Executive Officer
Phone: (604) 763-7565
jafarlinger@urbanfibre.ca