VANCOUVER, BC--(Marketwired - February 22, 2017) - Urban Communications Inc. (TSX VENTURE: UBN) announces that it has agreed to extend the term of its $4,400,000 existing loan facility with MHI Finance Corp. to October 2, 2018, a one year extension from the previous maturity date. The loan principal has been increased to $5,000,000 with $350,000 of that principal repayable in periodic payments prior to the new maturity date. The interest rate of the loan remains at 11%/annum, payable quarterly.
As part of the loan extension agreement the Company has also obtained a concession to vary the original loan terms that will allow it to create subordinate financing and also priority financing against assets that were previously secured by the MHI Finance Corp. security. In addition, the Company has negotiated an option to repurchase all of the 26,400,000 loan bonus warrants issued in connection with the initial loan and two subsequent loan increases. Upon exercise of the option this would represent a 15% reduction in the Company's fully diluted share position.
The Company also wishes to announce that the MHI Finance Corp. nominee to the board of directors, Michael Horowitz, has resigned prior to the conclusion of the loan extension agreement. CEO John Farlinger stated that "Mr. Horowitz brought significant energy and effort to bear in our corporate finance activities, and we wish him well in his future endeavours."
ABOUT URBAN COMMUNICATIONS INC.
Urban Communications Inc. (TSX VENTURE: UBN) is a telecommunications company providing 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. Urban has recently launched high-speed Internet service to residential and commercial subscribers on its network at 1,000 Mbps (1 Gbps).
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