The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Marketwire

TeraGo Concludes Strategic Review with Enhanced Growth Business Plan

RBC debt facilities increased to $42 million

Tuesday, April 16, 2013

TeraGo Concludes Strategic Review with Enhanced Growth Business Plan

18:00 EDT Tuesday, April 16, 2013

TORONTO, ONTARIO--(Marketwired - April 16, 2013) - TeraGo Inc. (TSX:TGO) (www.terago.ca) today announced that the strategic review initiated by its Board of Directors has been completed and has resulted in an enhanced strategic direction for the Company and an amended credit agreement to make available required funding in support of the enhanced strategic direction.

"The Special Committee, with the assistance of the Company's financial and legal advisors, evaluated a wide range of strategic options," said Charles Allen, TeraGo's Chairman of the Board. "We believe that the enhanced business plan the Company is announcing today, coupled with the continuing momentum from TeraGo's record results in 2012, offers the most attractive alternative for continuing shareholder value creation. At the recommendation of the Special Committee, the Board of Directors unanimously voted to conclude its formal process."

"With the end of the strategic review, our first priority is enhanced growth and that is what this plan is intended to achieve," said Bryan Boyd, TeraGo's President and Chief Executive Officer. "We will introduce and build a fibre-optic service delivery platform that will complement our existing fixed wireless technology platform, and leverage our spectrum portfolio. We will continue to target our traditional small to medium business market. Adding a fibre platform will create further growth opportunities and allow us to achieve benefits from further scaling our business. We plan to use fibre to address a new market for us - the requirements of larger business, enterprise and public sector customers looking for an alternative to our existing platform. We will also be able to more effectively accommodate growth among existing customers."

"Our strong financial position, with record revenue, EBITDA and earnings in 2012, as well as positive cash flow, allows us to capitalize on this opportunity and make investments, in fibre and wireless, linked to future growth. These expanded platforms will allow us to remain focused on providing our growing customer base with high capacity and reliable broadband access to the Internet and their private networks."

The fibre initiative is an extension to TeraGo's core business of offering high quality fixed wireless services to customers and the Company said that its proven growth strategy remains intact. The Company will continue to work towards increasing customer penetration in existing markets, expanding the cellular backhaul segment, introducing new revenue-generating services, and capitalizing on strategic growth opportunities through initiatives such as acquisitions.

TeraGo also announced that it has secured an additional $27 million in senior term debt financing for its enhanced business plan through an amended credit agreement with Royal Bank of Canada (RBC), Knowledge-Based Industries Banking Group - Ontario.

The $42 million total debt package consists of $12 million of existing drawn facilities which have been extended in term, an existing $3 million operating line of credit which is undrawn, and $27 million in new term debt facilities that will be available to support investment in the fibre-optic platform and for strategic and accretive acquisitions. The new facilities will have interest rates comparable to the existing facilities. The Company anticipates that, in addition to its existing resources, the new debt financing will provide sufficient capital to support its enhanced strategic direction.

Forward-Looking Statements

This news release includes certain forward-looking statements that are made as of the date hereof and that are based upon current expectations, which involve risks and uncertainties associated with our business and the economic environment in which the business operates. All such statements are made pursuant to the 'safe harbour' provisions of, and are intended to be forward-looking statements under, applicable Canadian securities laws. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. For example, the words anticipate, believe, plan, estimate, expect, intend, should, may, could, objective and similar expressions are intended to identify forward-looking statements. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. We caution readers of this news release not to place undue reliance on our forward-looking statements as a number of factors could cause actual results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed with the forward-looking statements. When relying on forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider the risks set forth in the 2012 MD&A and 2012 Annual Information Form that can be found on SEDAR at www.sedar.com and other uncertainties and potential events. Except as may be required by applicable Canadian securities laws, we do not intend, and disclaim any obligation to update or revise any forward-looking statements whether in words, oral or written as a result of new information, future events or otherwise.

About TeraGo Networks

TeraGo Networks Inc. provides small and medium sized businesses with carrier-grade wireless broadband, data and voice communications services. The national network service provider owns and manages its wireless IP network servicing 6,575 customer locations in 46 major markets across Canada including Toronto, Montreal, Calgary, Edmonton, Vancouver and Winnipeg. TeraGo Networks is a Competitive Local Exchange Carrier (CLEC) and is a wholly owned subsidiary of TeraGo Inc. (TSX:TGO). More information about TeraGo is available at www.terago.ca.

About RBC

Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate under the master brand name of RBC. We are Canada's largest bank as measured by assets and market capitalization, and are among the largest banks in the world, based on market capitalization. We are one of North America's leading diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance and investor services and wholesale banking on a global basis. We employ 80,000 full-and part-time employees who serve more than 15 million personal, business, public sector and institutional clients throughout offices in Canada, the U.S. and 49 other countries. For more information, please visit www.rbc.com

RBC's Knowledge Based Industries Group "KBI" services the needs of Information Technology, Life Sciences, Media & Entertainment and Cleantech companies across Canada. The KBI Group was established in 1994, comprises specialized account managers and a dedicated risk adjudication group that understands the unique characteristics of KBI companies. For more information, visit www.rbcroyalbank.com/technology.

FOR FURTHER INFORMATION PLEASE CONTACT:

Contact Information:
TeraGo Inc.
Investor Relations
1.877.982.3688
IR@terago.ca
www.terago.ca

Products
  • Globe Unlimited

    Digital all access pass across devices. subscribe

  • The Globe and Mail Newspaper

    Newspaper delivered to your doorstep. subscribe

  • Globe2Go

    The digital replica of our newspaper. subscribe

  • Globe eBooks

    A collection of articles by the Globe. subscribe

See all Globe Products

Advertise with us

GlobeLink.ca

Your number one partner for reaching Canada's Influential Achievers. learn more

The Globe at your Workplace
Our Company
Customer Service
Globe Recognition
Mobile Apps
NEWS APP
INVESTING APP
Other Sections