Destiny Announces Closing of $10 Million Financing and Oilfield Service Company Acquisition.CALGARY, Alberta--(BUSINESS WIRE)--NOV. 10, 1998--Destiny Resource Services Corp. (TSE/ASE "DSC (1) (Digital Signal Controller) A microcontroller and DSP combined on the same chip. It adds the interrupt-driven capabilities normally associated with a microcontroller to a DSP, which typically functions as a continuous process. See microcontroller and DSP. ") announced today that it has closed a $10 million private placement with Citibank Canada Citibank Canada is a unit of Citigroup of New York City. The Canadian unit has been operating since 1954, with Canadian headquarters in Toronto. There are also offices in Montreal, Calgary, London, Ontario and Vancouver. Investment Capital. The financing consists of a $10 million, 7 1/2% Subordinated Debenture subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before and Warrants to purchase 3,175,000 shares of Destiny at a price of $3.15 per share. The Debenture and Warrants have a five year term, although the Warrants may expire in as early as two years if Destiny's share price exceeds a certain level. Any proceeds received by Destiny from the exercise of the Warrants will be used by it to repay the Debenture. Griffiths McBurney and Partners acted as agent and financial advisor to Destiny in respect of the financing. The proceeds of the financing will be used by Destiny to fund the previously announced acquisitions of McConnell Group of Companies and JC Electric, further acquisitions and general corporate purposes. Destiny also announced today that it has acquired all of the issued and outstanding shares of JD and ME Holdings Ltd., a privately held, oilfield construction and maintenance company based out of Fairview, Alberta Fairview is a town in northern Alberta, in the heart of the Peace Country. It is fondly referred to as the "Heart of the Peace". History High-quality soil in the surrounding area attracted settlers in the early 1900s, who formed the hamlet of Waterhole. . The total purchase price is $1.28 million. Consideration for the acquisition consists of a $500,000 cash payment, the issuance of 161,290 Common Shares of Destiny at $3.10 per share and assumption of debt of approximately $280,000. Additional amounts may become payable in each of the next five fiscal years based on the financial performance of JD and ME. Adrian Erickson, President and C.E.O. of Destiny stated: "The acquisition of JD and ME Holdings Ltd. is consistent with our strategy of becoming the dominant player in strategic geographic regions. JD's business will continue to be focused on providing year round oilfield maintenance services, along with facility and small diameter pipeline construction. The acquisition allows us to get improved efficiencies from our existing equipment and manpower as we continue to look for ways to increase utilization of these resources and smooth out the cyclicality of our business". Revenue of JD and ME Holdings for the 12 months ended September 30, 1998, is approximately $4.4 million (unaudited) with normalized net income of approximately $350,000 (unaudited). The effective date of the acquisition is June 1st, 1998. Destiny Resource Services Corp. is a Calgary based service company providing integrated services In computer networking, IntServ or integrated services is an architecture that specifies the elements to guarantee quality of service (QoS) on networks. IntServ can for example be used to allow video and sound to reach the receiver without interruption. to the oil and gas industry in Canada, the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Central and South America, the Middle East, Africa and Southeast Asia. Neither The Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. nor the Alberta Stock Exchange Alberta Stock Exchange See Canadian Venture Exchange (CDNX). has approved nor disapproved of the information contained herein. |
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