Call-Net to acquire Group Telecom network assets in New Brunswick and Nova Scotia from Bell Canada, along with an option to acqu
03 5월 2005 - 10:27AM
PR Newswire (US)
Call-Net to acquire Group Telecom network assets in New Brunswick
and Nova Scotia from Bell Canada, along with an option to acquire
remaining local network in Eastern Canada Company positioned to
significantly increase its access footprint, adding over 225,000
fibre kilometres and become Eastern Canada's largest CLEC TORONTO,
May 2 /PRNewswire-FirstCall/ -- Call-Net Enterprises Inc. today
announced that it has entered into an agreement with Bell Canada to
purchase certain local and inter-exchange carrier network assets in
New Brunswick and Nova Scotia and to purchase an option on certain
other CLEC (competitive local exchange carrier) network assets in
Eastern Canada. The transaction is part of Call-Net's acquisition
of the 360networks Corporation (360/GT) customer base in Eastern
Canada from Bell Canada, announced in November of 2004. The
agreement contemplates that Call-Net will purchase virtually all of
the former Group Telecom's network assets in New Brunswick and Nova
Scotia including long-haul (inter-city) and access (intra-city)
fibre, together with switching and network equipment from Bell
Canada. Call-Net will take ownership of these assets at closing,
which is expected to occur in the third quarter of 2005. The
purchase price for these assets will total $12.6 million and will
be paid at closing. At that time, Call-Net's agreement with Bell
Canada to provide services and maintain the network in these
provinces will be amended to reflect the change in ownership. In
addition, at closing, Call-Net will acquire from Bell Canada an
option to purchase over 90 per cent of the remaining CLEC network
of former Group Telecom in the provinces of Ontario, Quebec, and
Newfoundland and Labrador. The maximum purchase price of these
assets totals $22.4 million. Call-Net has paid Bell Canada $1.7
million on account of the option fee. The option grants Call-Net
the exclusive right to take ownership of these assets by paying the
balance of up to $20.7 million on the exercise of the option,
currently expected to be at the end of 2006. "When today's
transaction is completed, Call-Net will become the largest CLEC in
Eastern Canada with an additional 225,000 kilometres of fibre
network, nine co-locations and direct access to over 1,000 office
buildings," said Bill Linton, president and chief executive
officer, Call-Net. "This provides us with the opportunity to
accelerate revenue growth in business services and reduce the
carrier costs for both our business services and consumer services
groups. With their high bandwidth access capabilities and network
reach in Eastern Canada, these assets will compliment our existing
network and add to our portfolio of services." At closing, as part
of this agreement Call-Net and Bell Canada will extend their
transitional services agreements a further 12 to 18 months beyond
December 31, 2006 in order to minimize disruption during the
migration of the former Group Telecom network assets to Call-Net.
Call-Net and Bell Canada also expect to enter into agreements, at
closing, giving each other certain access to each other's network
during the transition and migration phase. The completion of the
transaction is subject to the negotiation, execution and delivery
of definitive agreements setting forth the terms of the
transaction; the completion of all required regulatory filings; all
necessary consents, approvals and advance rulings; the satisfactory
completion of Call- Net's due diligence; and if required, the
approval of the transaction and the definitive agreements by the
board of directors of each of Call-Net and Bell Canada. About
Call-Net Enterprises Inc. Call-Net Enterprises Inc., (TSX: FON,
FON.NV.B) primarily through its wholly owned subsidiary Sprint
Canada Inc., is a leading Canadian integrated communications
solutions provider of home phone, wireless, long distance and IP
services to households, and local, long distance, toll free,
enhanced voice, data and IP services to businesses across Canada.
Call-Net, headquartered in Toronto, owns and operates an extensive
national fibre network, has over 151 co-locations in five major
urban areas including 33 municipalities and maintains network
facilities in the United States and the United Kingdom. For more
information, visit http://www.callnet.ca/ and
http://www.sprint.ca/. Note for Investors: This news release may
include statements about expected future events and/or financial
results that are forward-looking in nature and subject to risks and
uncertainties. For those statements, we claim the protection of the
safe harbour for forward-looking statements provisions contained in
the Private Securities Litigation Reform Act of 1995. The Company
cautions that actual performance will be affected by a number of
factors, many of which are beyond its control. Future events and
results may vary substantially from what the company currently
foresees. Discussion of the various factors that may affect future
results is contained in the company's recent filings with the
Securities and Exchange Commission, the Ontario Securities
Commission and SEDAR. DATASOURCE: Call-Net Enterprises Inc.
CONTACT: Karen O'Leary, Corporate Communications, (416) 718-6445,
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