Prestige Telecom Inc.
TSX VENTURE : PR

Prestige Telecom Inc.

December 15, 2008 08:00 ET

Prestige Telecom Announces Identity of Major Investor in Private Placement Financing

MONTREAL, QUEBEC--(Marketwire - Dec. 15, 2008) - Prestige Telecom Inc. ("Prestige" or the "Company") (TSX VENTURE:PR) of Montreal, Quebec, announces that Novare Holding Inc. (the "Major Investor"), an arm's length private company controlled by Guy Laliberte, President of the Major Investor and founder of the largest private entertainment producer in Canada, will be the major investor in its previously announced private placement offering of up to 28,000,000 common shares ("Common Shares") at a price of $0.25 per share for aggregate gross proceeds of up to $7.0 million (the "Private Placement Financing"), and in its concurrent private placement of a convertible note in the aggregate principal amount of $4.5 million (the "Convertible Note Financing"). The Private Placement Financing and Convertible Note Financing are expected to close concurrently with the following previously announced transactions:

(a) Prestige's acquisition (the "Acquisition") of Radian Communication Services (Canada) Limited;

(b) the establishment of Prestige's new bank credit facility ("Credit Facility") with a major Canadian financial institution; and

(c) a brokered private placement of 8,600,000 Common Shares at a price of $0.25 per share for aggregate gross proceeds of $2,150,000 (the "Brokered Private Placement Financing").

Pursuant to the Acquisition, Prestige has also agreed to pay a fee to two subordinated secured lenders (the "Subordinated Lenders") by the issuance of an aggregate of 800,000 common shares to the Subordinated Lenders.

Assuming the completion of the transactions, the Major Investor will acquire 18,000,000 Common Shares pursuant to the Private Placement Financing for an aggregate subscription price of $4.5 million as well as a convertible note in the aggregate principal amount of $4.5 million pursuant to the Convertible Note Financing, and a nominee of the Major Investor will join the Board of Directors of Prestige. Brian W. McFadden will resign as a Director to make room on the Board of Directors for the Major Investor's nominee.

"I have chosen to privately invest in this Canadian company during these difficult financial times because I believe that we need to ensure a solid future for entrepreneurs and Canadian assets," said Mr. Laliberte. "I also believe that Prestige Telecom has an interesting growth potential."

The closing of each of the Acquisition, the new Credit Facility, the Private Placement Financing, the Convertible Note Financing and the Brokered Private Placement Financing is expected to take place later today.

About Prestige Telecom Inc.

Prestige is a leading provider of network engineering, materials furnishing, installation and support services (commonly referred to as EF&I services) required to construct, operate and maintain wireline, wireless and cable television networks. Prestige assists telecommunications original equipment manufacturers and service providers to engineer, install and upgrade their infrastructures to support enhanced voice, high speed data and video services.

In Canada, Prestige operates eight service locations based in Montreal, Quebec; Mississauga and Markham, Ontario, Surrey, British Columbia, Calgary and Edmonton, Alberta, Bedford, Nova Scotia and St-John, New Brunswick and has 400 professional and technical personnel.

Forward-Looking Statements

This press release contains certain forward-looking statements with respect to the Company. Such forward-looking statements are dependent upon a certain number of factors and are subject to risks and uncertainties. Actual results may differ from those expected. The information contained in this press release is dated December 15, 2008 the date on which the Directors approved the press release. Management does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information or future events, except when required by the regulatory authorities.

Note to readers: Complete unaudited consolidated financial statements and Management's Discussion & Analysis of Financial Position and Operating Results were posted on SEDAR and are available at www.sedar.com.

The TSX Venture Exchange accepts no responsibility for the adequacy or the accuracy of this press release.

Contact Information

  • Prestige Telecom Inc.
    Pierre Yves Methot
    Chairman and Chief Executive Officer
    (514) 457-4488, Ext. 277
    Email: pymethot@prestige-tel.com